Where did the bears go

Tom McKay

Where did the bears go? The Investors Intelligence sentiment index which measures the proportion of investment writers who are currently bearish has fallen to its equal lowest in the past 20 years whilst the American Association of Individual Investors weekly survey which also ranks bearish sentiment is the lowest it's been since 2005. What this should mean is that there are few people left with negative views - in other words, fewer potential buyers who had been sitting on the sidelines but could still put money into the market. It is a sign that the market is looking toppy. It's worth keeping in mind that neither measure has worked well as a market timing tool but the sentiment measures are looking worrisome. Everyone has bought the idea that the Federal Reserve and other central banks will keep pumping up the market. If they waver, the bears will growl again.


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Medium screen shot 2016 01 12 at 2.25.34 pm

James Marlay

The alternative to this is that many have now succumb to a short term view that normal asset valuations are being overpowered by stimulus.

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