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Tuesday, October 21, 2014


I have not looked at sentiment in a long time since everything was bullish and the market just kept on rising.  However, there was an odd development in sentiment last week.  Lets start with the NAAIM survey.

Last week's survey came in at 9.97.  That is the first time under 10 since the mini crash in 2011.  Now take a look at the AAII survey.

As the market tumbled down over the last two weeks retail investors got more bullish.  We have a situation where institutional investors are in down right panic mode while retail investors are feeling strongly bullish.  The AAII bears came in at 33.7%.  Back in 2011 when the NAAIM survey was last below 10 the AAII bulls dropped to 27% and the AAII bears rose to 49%.  Here is a look at the Bespoke weekly poll.

The Bespoke blog readers are extremely bullish.  They have been extremely bullish and correct at times in the past.  However, the bulls have not really flinched much at all on this sell off.  One more to look at is the II survey.

While the II bulls have come down quite a bit to 37 the bears are still in the cellar at 17.  The last time SPX hit the 200 DMA the II bears were up around 28.

I can't recall ever seeing a disparity quite this big.  We have the most technical damage since 2011.  Institutional investors represented by the NAAIM survey are showing outright panic.  Meanwhile the market newsletter writers and retail investors are showing no fear at all.  This certainly is not the normal way to make a low.  I guess we will see if the worst is over or not.


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