Sentiment Charts

Investors Intelligence

Investors Intelligence Survey

Each week the service Investors Intelligence surveys some 140 financial newsletter writers to determine whether they are leaning bullish or bearish in their opinions to subscribers. The resulting Investors Intelligence Survey compiles the data to arrive at a weekly percentage of bulls v.s. bears. The Survey is considered a contrarian indicator, since extremes in either direction are signals of reversal of the marketís current trend. 

We offer a series of charts based on Investors Intelligence Survey data. The first is a ratio chart. A rising trendline means bullish sentiment is outpacing bearish sentiment. The 2.00 area is associated with bullish extremes and market tops; 0.60 or lower with bearish extremes and market bottoms.

We also include a chart of the Bull/Bear Spread, which is specifically used by Investors Intelligence to measure sentiment.  According to Investors Intelligence, "Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative. They reflect fully invested positions. High levels of bearishness are usually positive because they most often occur after a major market decline, and reflect that there is plenty of cash on the sidelines...Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded."

The remaining charts plot the weekly survey data individually for the percent of bulls and bears, and a third chart compares the two.   Data is made available courtesy of Investors Intelligence

Investors Intelligence Survey

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