Thursday, August 4, 2011

Contrary Indicators

Thepercentage of stocks above the 20 day moving average is at a level associated with rallies.

This week's AAII survey shows a big increase in bears, to 50%. That is the highest level since late May 2010. The bull/bear spread is -23%, which is high. The best bearish edge is whenever the bull/bear spread is positive.

6 comments:

Jmperry said...

Agreed-- it feels like too much, too soon. I dumped 2/3rds of my puts this morning, and only my incredible bearishness keeps me from dumping the rest.

CP said...

I'm making a list of things to buy. Opportunities in energy preferreds.

Jmperry said...

Good God. Clearly i was far too early.

CP said...

What are you buying?

Jmperry said...

Nothing so far - I don't see anything that's gotten dirt cheap yet. I meant I was far too early selling my puts.

CP said...

I'm surprised that the selloff has gone this far. I am now bullish on the energy complex and bearish on Treasuries.