If you go back through my Wall Street History archives, you will
find a piece dated 8/27/99 labeled “Investors Intelligence.or
lack thereof.” Today is as good a time as any to update the data.
[The following text is largely the same as that of 8/27/99.]
The Investors Intelligence reading is the result of a survey
of about 140 financial newsletter writers that is taken weekly by
Michael Burke and his group. Historically, it has been one of many
indicators that strategists use to gauge market sentiment and it is
often viewed as a contrarian indicator, i.e., a high bullish reading
may mean rough sledding ahead (an excess of optimism); a high
# of bears may signal that we are near a market bottom (too
much pessimism).
Generally speaking, when the number of bulls or bears is above
60% or below 20%, it certainly is worth noting. The past decade,
however, has witnessed few such obvious extremes. In fact,
since I started keeping this data over 10 years ago, only 9 weeks
have we seen bullish readings of 60% or higher, 8 of which were
in the first half of 1999. [The last 60% + bull ratio was 6/4/99,
when the Dow was 10799. Since in the 13 succeeding months
the Dow hasn”t gone anywhere.though the Nasdaq has.the
sentiment reading from a contrarian standpoint wasn”t a total
bust.]
The number of times the bear reading has dropped below 20% is
a whopping 3 (and they were consecutive weeks back in early
1992).
The survey is released on a Wednesday and represents the
accumulation of data from the prior week. So even though you
see it on the following Saturday in Barron”s, it”s really only fair
to match the reading versus the level of the market one week
earlier. Since it”s inexact, in the following table I have matched
the bull/bear reading up with the closest Dow Jones level that I
deem appropriate, in this case the weekly close prior to the
release of the data.
[The difference between the bulls and bears is labeled
”correction” for those advisors who are basically bullish, but are
looking for a short-term pullback. For the purposes of this table
I”m leaving it out.]
The following goes back to 6/25/99. The first listed date is
6/30/00. Unfortunately, different browser versions may view the
table a little askew. I apologize in advance.
Date Dow Bulls Bears
6/30 10447 51.4 32.7
6/23 10404 50.0 32.4
6/16 10449 50.0 33.3
6/9 10614 49.1 33.6
6/2 10794 48.1 34.3
5/26 10299 46.3 34.3
5/19 10626 46.0 32.4
5/12 10609 49.1 33.6
5/5 10577 48.6 31.2
4/28 10733 47.6 31.4
4/21 10844 50.5 29.3
4/14 10305 54.9 28.3
4/7 11111 56.9 26.7
3/31 10921 54.9 29.2
3/24 11112 54.1 29.2
3/17 10595 55.7 26.4
3/10 9829 52.3 29.0
3/3 10367 53.4 27.6
2/25 9862 52.2 28.3
2/18 10219 51.8 28.6
2/11 10425 53.7 26.9
2/4 10963 53.2 27.9
1/28 10738 52.3 29.7
1/21 11251 55.9 26.1
1/14 11722 54.0 26.5
1/7 11522 54.5 26.4
12/31 11497 52.2 28.3
12/24 11405 55.0 27.0
12/17 11257 53.2 29.4
12/10 11224 52.7 29.1
12/3 11286 51.7 29.3
11/26 10988 53.0 28.7
11/19 11003 52.1 29.1
11/12 10769 50.4 30.1
11/5 10704 44.4 35.9
10/29 10729 42.1 38.6
10/22 10470 41.1 38.4
10/15 10019 41.0 38.5
10/8 10649 39.2 37.5
10/1 10273 41.0 36.8
9/24 10279 42.9 32.8
9/17 10803 42.9 30.4
9/10 11028 41.5 31.4
9/3 11078 44.1 30.5
8/27 11090 42.9 31.9
8/20 11100 44.5 31.1
8/13 10973 45.8 31.3
8/6 10714 50.0 29.3
7/30 10655 52.2 27.8
7/23 10921 53.6 24.6
7/16 11209 54.1 27.9
7/9 11193 55.2 26.7
7/2 11139 52.6 27.2
6/25 10552 55.8 25.7
*Note: On my 8/27/99 piece, the 8/13/99 Bear reading should
read 31.3
[Investors Intelligence is put out by Chartcraft. 30 Church St.,
New Rochelle, NY 10801. (914) 632-0422]
Brian Trumbore
