Tags: Investors Intelligence | S&P 500 | bullish | ratio

Bullish Percentage Jumps to Multi-Year High

By    |   Tuesday, 28 May 2013 07:38 AM

I have been talking about the Investors Intelligence ratio being high enough to cause concern for several months now, but the ratio just keeps getting more skewed to the bullish side.

Last week’s report showed a bullish percentage of 55.2 percent, the highest reading since April 2011.

The bearish percentage dipped to 18.8 percent, giving us a ratio of 2.936.

The last time the ratio was above 3.0 was in April 2011, right as the Standard & Poor's 500 peaked near the 1,370 mark. Over the next six months, the index dropped over 20 percent to its low in October 2011.

Looking back over the last six years, there have only been a handful of times that the ratio has gone above 3.0 — the aforementioned April 2011 period, a period in late 2009 and early 2010 when it vacillated back and forth above and below three and then in October 2007. The ratio also came close to moving above 3.0 in April 2010.

What you should notice about these time periods mentioned above is that they all preceded a dip in the market. Early 2010 saw a small dip, the S&P 500 dipped almost 20 percent in the second quarter of 2010 and of course October 2007 was the peak before the bear market that lasted almost a year and a half.

Now you can see why I watch the Investors Intelligence ratio so closely and why it has me worried.

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I have been talking about the Investors Intelligence ratio being high enough to cause concern for several months now, but the ratio just keeps getting more skewed to the bullish side.
Investors Intelligence,S&P 500,bullish,ratio
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2013-38-28
Tuesday, 28 May 2013 07:38 AM
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