Since the election, the focus of most investors has been the budget negotiations and the looming fiscal cliff.
While investors may be focusing on it, they haven’t let it keep them from becoming more bullish.
The Investors Intelligence report from last week shows that the bullish percentage has jumped to 48.9 percent. This is the highest bullish percentage since the last week of September.
You may recall that the market peaked in mid-September, moved sideways for a month and then fell from mid-October through mid-November.
The ratio of bulls to bears is right at 2, with the bearish percentage coming in at 24.5 percent.
The ratio hasn’t been over 2 since September.
The survey of investment newsletters indicates that there is a belief that something will get done in Congress and that everything will be all right.
Personally, I don’t have that much faith in Congress. Sure they are working overtime trying to get a deal done, but how watered down is the deal going to be?
Congress is good at waiting until the last minute to work together and then spitting out legislation with little change.
Even if a deal is reached, there will be yet another battle looming as the debt ceiling debate will come up yet again within the next few months.
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