FTAlphaville has a timely post today on stock market sentiment:
Where are all the bears? Even some of the usual suspects have stopped growling, with David Rosenberg of Gluskin Sheff going so far as to dispute the idea that he’s a permabear….Just how few is itself a cause for worry:
It is just about the equal lowest in 20 years. And it isn’t alone. This is the American Association of Individual Investors weekly survey:
What this should mean is that there are few people left with negative views – in other words, fewer potential buyers who had been sitting on the sidelines but could still put money into the market. In other words, it is a sign that the market is looking toppy.
The post makes the point that these sentiment indicators sentiment tends to bottom mid rally, not end rally. but it’s conlcusion is very much on the money:
Still, the sentiment measures are looking worrisome.
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Everyone has bought the idea that the Federal Reserve and other central banks will keep pumping up the market. If they waver, the bears will growl louder than ever.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
