Recently in my “Week in Review” column, I have highlighted an
old indicator that I’ve been keeping track of since March 1990,
the “Investors Intelligence” survey of over 100 financial
newsletter writers that is released weekly by Chartcraft.
Historically, it has been one of many devices that strategists use
to gauge market sentiment and is typically viewed as a contrarian
indicator, i.e., a high bullish reading may mean rough sledding
ahead (an excess of optimism), while a high number of bears
may signal that we are near a market bottom (too much
pessimism…everyone who wanted to sell already has).
The survey is released on Wednesdays and represents the
accumulation of data from the prior 7-day period, so there is a
lag time involved…just something to be aware of during volatile
markets like today’s.
Lately, the reading has been flashing some interesting signals,
but in looking back over my archives I just realized I haven’t
done anything on the topic in 5 ½ years! Aside from the fact I’m
depressed that that much time has already transpired, the reason
for the lengthy period between updates is that the Investors
Intelligence indicator has simply been worthless over that spell.
But that’s no longer the case by my way of thinking.
Before you look at the below readings, understand the people
who put the survey together say a normal bull/bear ratio is 45/35.
You really need numbers significantly in excess of 50 or below
30 before most of us take notice.
Below I try and give you a sense of key data points. The lack of
figures between 12/02 and 7/08 is because as noted above there
were few discernible trends. But between 10/07 and today, that
changed.
Date……..Bulls…Bears….Dow Jones
5/4/90……33.3….49.6……..2710
6/8/90……47.8….35.4……..2862
7/27/90…..49.6….34.1……..2898…week before, Dow hit 2999
8/10/90…..37.6….45.6……..2716…invasion of Kuwait, 8/2
9/21/90…..27.9….55.7……..2512
10/12/90…32.2….53.7……..2398…market bottom for cycle
12/7/90…..41.4….50.0……..2590
1/11/91…..39.8….46.6……..2501…uncertainty
1/18/91…..34.5….52.1……..2646…bombing starts 1/17
2/15/91…..51.3….36.1……..2934…ground war begins 2/24
3/1/91……58.6….29.3……..2909…euphoria, Bush at 90%
6/14/91…..38.8….28.4……..3000…reality setting in
12/6/91…..36.9….39.7……..2886
1/24/92…..60.0….19.1……..3232…pickup in bulls on rally
7/3/92……35.3….31.9……..3330…economic concerns
11/6/92…..45.1….31.0……..3240…election week
6/10/94…..25.2….51.3……..3773…just jumping ahead
12/9/94…..33.1….59.1……..3691…good ‘buy’ point
2/9/96……53.8….29.4……..5541
8/2/96……40.8….43.4……..5679
1/31/97…..54.3….26.7……..6831
4/11/97…..35.0….41.4……..6391…crossover
4/3/98……53.2….22.6……..8983
4/24/98…..54.6….23.1……..9064
9/4/98……40.7….43.2……..7640
9/18/98…..36.4….47.5……..7895
11/27/98…57.9….29.8……..9333
2/12/99…..61.2….25.9……..9274
5/7/99……58.6….27.6…….11031
9/3/99……42.9….31.9…….11078
12/31/99…55.0….27.0…….11497
1/14/00…..54.5….26.5…….11722…all-time high for Dow
3/10/00…..53.4….27.6………9928..but Nasdaq hits high of 5048
3/24/00…..55.7….26.4…….11112…incredible volatility
5/26/00…..46.0….32.4…….10299
9/1/00……47.1….33.7…….11238…all indices had rallied back
12/29/00…51.4….36.2…….10786
2/2/01……61.0…..30.0…….10864…61.8* the following week
4/27/01…..43.9….41.8…….10810
7/13/01…..51.0….25.0…….10539
9/21/01…..35.7….37.6……..8235…post-9/11, market reopened
12/28/01…48.4….27.3…….10136
1/25/02…..52.6….23.7……..9840
7/19/02…..35.4….39.6……..8019
8/30/02…..45.7….31.5……..8663
10/18/02…28.4….43.2……..8332…market bottomed 10/9-10/10
12/6/02…..51.1….25.0……..8645
3/14/03…..39.8….37.5……..7859…7740 week earlier
6/20/03…..60.2….16.1……..9200
12/31/04…62.9….19.6……10783
4/15/05…..46.2….29.0……10087
5/5/06……43.9….28.6……11577
10/20/06…52.2….30.0……12002
7/13/07…..49.5….21.3……13907
10/19/07…62.0….19.6……13522…14164 high 10/9
1/18/08…..45.6….26.7……12099
3/21/08…..30.9….44.7……12361
7/16/08…..27.8….48.9……11239*…after closing below 11000
on 7/15.
*The above dates are all for Friday except the last entry, which is
a Wednesday, the release date for the data. I wanted to give you
the latest, especially in light of the market’s big moves, both up
and down.
Now it’s up to you to draw your own conclusions. I’ll continue
to give mine in “Week in Review.”
Wall Street History returns next week.
Brian Trumbore
