http://www.naaim.org/news/naaim-survey-of-manager-sentiment/
I am still learning about how it can be used, but there are some things that have become apparent. Here is this weeks chart. The S&P 500 they show is the total return index which is slightly different then SPX.
The higher the Avg number, the more positioned long the money managers are. We can see that the number is pretty volatile and these people can pile in and out of the market pretty fast sometimes. The low in 2010 and again in 2011 showed no positive divergences in the sentiment. One day they were selling like crazy and then they shifted and started buying like crazy. However, market highs do show some divergence. Look at the data in the spring of 2011. There was some divergence in the number as SPX made new highs. 2007 is not shown on this chart, but is in the data available on the site. There was a similar divergence in the numbers as the market retested the summer high in October. We can see that the rally this year did not get the bullish sentiment as high as it did last year. It would seem to indicate money managers are not as confident this year. The number also clearly diverged as the market made a higher high in April.
Currently we have SPX below the April low, but the survey is more bullish now. I showed a 10 MA breadth chart last week that suggested people buying the dip. That would seem to corroborate the NAAIM number. If the market turns up there should be some bull fuel here as there is money on the sidelines. However, the number was divergent at the highs like it was last year. We could have made another significant top. If the market continues down, there is bear fuel as they have a pretty significant long allocation. Much of the recent buying is under water also at current prices.
I think this is an interesting survey. As we get more data in the months and years ahead it could become easier to interpret it.
Bob
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