Back in June I reported that the percentage of Bulls to Bears reported by Investor Intelligence were at the highest levels since 1987. Peter Eliades has done extensive work with sentiment and on December 17, 2003 he reports, “We spent some time looking through this year's Investors Intelligence (30 Church St., PO Box 2046, New Rochelle, NY 10801) data in a spreadsheet that has the weekly data going back to 1969 (prior to that time data was released every two weeks rather than weekly). We noticed that the weekly reading of bulls divided by bulls plus Bears has been over 70 percent for 31 consecutive weeks and we were curious if that ever happened before over the past 3 + decades. The answer is no. Think about that! We just recently finished the decade of the 1990s which were remarkably free of anything resembling a bear market. The stock market actually advanced from 1982 to the year 2000 without seeing one year where the low of the year surpassed the low the previous year and yet, through that whole period of time, sentiment never reached the pervasive levels of bullishness that we now see after a rally which has failed to take either the Dow or the S&P anywhere near their all-time highs and which, when viewed in light of the Nasdaq Composite, has brought that index back only slightly towards its all-time highs as current prices remain over 60% below the highs of the year 2000.” My findings on sentiment are exactly the same as Peter’s. As I said earlier I look at the ratio of Bulls to Bears and this ratio now sits at 3.15 Bulls for every 1 Bear. This ratio has been hovering at or above the 2.45:1 level now for 29 weeks. This is also an all time record. We have never seen a period where this ratio has been at this level for this long before. Yet, prices move higher. You can contact Peter at 800-888-4351.
Investors Intelligence has recently reported buying climaxes to be at all time highs. These buying climaxes occur at market tops. According to Investors Intelligence these buying climaxes are signs of distribution. This is exactly what I have been saying from my studies of advancing volume. Yet, prices move higher.
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