Bad News For Bears

The Investors Intelligence data is out and the bulls dropped to 36.7% while the bears jumped to 31.1%.  The II data, in conjunction with the Rydex data shows that it did not take long for investors to become pessimistic again. This leads me to believe that the downside will be limited in the near term and that it will take a financial accident to take the market significantly lower in the near term.

This increases my conviction that a move lower over the next couple of days should be bought. It just seems less likely that we will get a meaningful move lower. This is a tough situation as sentiment indicators are supporting the market but the economy is deteriorating and stocks are not cheap.

5 comments:

Anonymous said...

How do you see PFE react in this environment and how high it can get in near term? Thanks!

Tsachy Mishal said...

Pfizer is not expensive but I prefer Gilead.

Anonymous said...

Any thoughts on the GILD slide? The stock has consistently underperformed the averages for the past week. And it appears that the company is buying aggressively.
Praguer

Tsachy Mishal said...

Overall it is performing well since the buyback started. The market is lower and the stock is higher. I think the stock simply got ahead of itself. It does not help that the Genzyme talks are on hold until September. The Sanofi board cant be bothered to negotiate during their month long vacation. I still believe a deal happens.

Tsachy Mishal said...

I have no intentions of reducing the position and it still remains my largest position although I might sell covered calls again.