Investors Intelligence Bears

The Investors Intelligence bears have fallen below 20% to 19.1%. I have found over the years that the bears being below 20% is the most important aspect of the indicator when looking for a top. The level of bulls is less important. We have been hovering very slightly above 20% for weeks and there is nothing magical about the round number 20% but this raises my conviction level ever so slightly that there is trouble ahead. I am contemplating getting a little more aggressive if we rally through the end of the day.

4 comments:

Anonymous said...

I'm beginning to doubt these surveys. I work for a professional trading firm and the entire floor has been trying to short since Friday.

Market Owl said...

Yeah, I look at some of these survey numbers and there is no way traders are as bullish now as they were in 1999 or 2000, or even 2006 or 2007.

Most blogs I see are bearish and looking for a top or at least a pullback.

Anonymous said...

There seems to be a great divide. When I discuss markets with money managers, they are extremely bullish long term. When I discuss markets with short term daytraders/swing traders, they are bearish. I believe sellers/shorts mostly come from the short term trader. Since their holding period is so short, there is always pent up buying to cover. In the meantime everyday fed partakes in it's 6-8billion $ pomo which banks swap proceeds from their treasury sales into equities and futures. every day, there is a disequilibrium of buyers to sellers. you need 6bb in selling to just keep the market in equilibrium. short term traders are not going to do that.

Anonymous said...

I believe markets will go lower when the short term bears convert to the bullside which may be happening