Wednesday, October 6, 2010

Sentiment Off the Charts

Things are absolutely crazy. I have never seen sentiment like this before looking back through history. Everyone seems extremely sure where everything is going.

All from the daily sentiment index:

Dollar bulls - 4% currently 77.439 (bottom at 74.17 in Oct 2009 - 7% bulls)
Euro bulls - 97% currently 1.3928 (peak at 1.5147 Oct 2009 - 93% bulls)
Gold bulls - 95% currently (don't know if there has been a higher high than that)
Silver bulls - 96% currently (98% bulls on Feb 29, 2008 - 3 days later it made its high and declined 57% within 9 months)
Equity markets - 88% ish bulls (don't have the latest number) - (87% ish was the April high)

I have never seen so many investors so sure on where everything is going across a wide swath of markets. Take the non farm payroll number this Friday. Everywhere I turn I read - If it is bad and more Americans are unemployed that is equity bullish because it means more quantitative easing. If the number is good than that is bullish equities because the economy is doing better than what was thought.

These number don't tell you when exactly a turn is coming but at some point a turn is coming. Not only are these extremes but the coordination of the extremes are unbelievable. Stay nimble.

Today was fairly constructive to restart a topping process. NASDAQ was knocked down hard with several high fliers getting really beaten down. Time will tell.

1 comment:

themog said...

Wow, while discussing QE 2 right now on CNBS, Larry Meyer issued a sad but true synopsis of these idiots thoughts. He said something along the lines of "you have to do something and hope for the best." I cant believe these idiots are truly making the decisions. Wow is all I can say.