• 707 days Will The ECB Continue To Hike Rates?
  • 707 days Forbes: Aramco Remains Largest Company In The Middle East
  • 709 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,108 days Could Crypto Overtake Traditional Investment?
  • 1,113 days Americans Still Quitting Jobs At Record Pace
  • 1,115 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,118 days Is The Dollar Too Strong?
  • 1,119 days Big Tech Disappoints Investors on Earnings Calls
  • 1,119 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,121 days China Is Quietly Trying To Distance Itself From Russia
  • 1,121 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,125 days Crypto Investors Won Big In 2021
  • 1,126 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,126 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,129 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,129 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,132 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,133 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,133 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,135 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

The Ultimate in Investor Sentiment

Figure 1 is a weekly chart of the SP500. The indicator in the lower panel is a composite of the "dumb money", Rydex asset data, and insider buying indicators that we show every Sunday in our weekly wrap up on investor sentiment.

Figure 1. SP500/ weekly
SP500 weekly chart

It is always best, in my opinion, to have as many points of light shining on an issue as possible, and what we see from this composite indicator is that the indicators have yet to line up. That is, the "dumb money" indicator is giving a bull signal, but corporate insiders are neutral and the Rydex market timer remains very bullish. It should be noted and as pointed out in Sunday's sentiment wrap up, corporate insiders are buying, and the buying is the most since August, 2010. However, a buy signal has not been generated yet. I suspect that further selling (i.e., lower prices) or more volatility will have corporate insiders buying. At that point, 2 out of 3 of our sentiment indicators will be flashing buy signals.

Several anomalies are worth noting, but I do not believe that they affect the current course of action -- which is to be bullish when others are bearish. Corporate insiders were buying the dips throughout the 8 month 2007/ 2008 market topping process. In addition and like now, the Rydex market timers did not confirm the bullish signals coming from the "dumb money" indicator and corporate insiders.

This 3 indicator look goes back to 2004, and it is clear from the data that the best bottoms leading to the most sustainable price moves occur when all 3 indicators are in alignment.

 

Back to homepage

Leave a comment

Leave a comment