Wednesday, August 5, 2009

Investors Intelligence Survey Showing Possible Pullback

After looking at a few things this evening, just thought I would point out that the latest Investors Intelligence Survey numbers for this week show as big a spread of bulls vs. bears since June 10, which was only one day before a month-long pullback started on the S&P, Nasdaq, XLF, oil, etc. - pretty much everything. Bulls back then were at 47.7% versus 23.3% bears. This week, we have 47.2% bulls vs. 25.8% bears. Not quite as many bulls today, but very close to the spread we had, and regardless of past comparisons, it gives the impression of a very complacent market.

We'll see if this matters tomorrow and the rest of this week I guess, but the more I think about, the more I expect a pullback soon. We're at the top of this broadening formation on the S&P and Nasdaq and the Dow so it would make sense. Based on this, I am pretty sure I will be taking the rest of the week off - I get the feeling buying here is just too risky unless you're scalping intraday. I could be wrong and we could move another 10% from here, but it would be surprising. A pullback is healthy and beneficial and if it happens, that doesn't mean the bulls are done. But for now, I think I will be staying in cash. Best of luck Thursday.


Anonymous said...

Where did you get this investors intelligence data? Very interesting. thanks a lot

Mac said...

If you search google for "investors intelligence survey", you'll find several sites that post the information.