Tags: Sentiment | VIX | Investors Intelligence | stock

Sentiment Toward Stocks Changes Drastically

By    |   Tuesday, 03 Sep 2013 07:43 AM

Stocks have declined in three of the last four weeks, and this has had an impact on the sentiment indicators.

First, the Investors Intelligence ratio has dropped sharply during this four-week stretch. On Aug. 7, the ratio was at 2.789. After the bullish percentage dropped to 38.1 percent and the bearish percentage rose to 23.8 percent last week, the ratio came in at 1.601.

The current reading on the ratio is the lowest reading since late November, and the current bullish percentage is the lowest since Nov. 21.

The second indicator that showed a big shift was the CBOE Volatility Index (VIX). The VIX closed at 17.01 on Friday and was as high as 17.81 during the day. The indicator was near the 14 level heading into last week’s trading.

Looking back over the last 10 months, there have been two pullbacks in the market. During these two pullbacks, the VIX peaked above the 21 level.

The sentiment shifting away from the overly optimistic readings is encouraging, but I still think a little caution is warranted.

The tensions in the Middle East are a concern and the economy is still not really firing on all cylinders.

The rally over the past 10 months has been a little too strong and shows that investors are looking ahead with high expectations.

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Stocks have declined in three of the last four weeks, and this has had an impact on the sentiment indicators.
Sentiment,VIX,Investors Intelligence,stock
219
2013-43-03
Tuesday, 03 Sep 2013 07:43 AM
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