friday fumblings, page-166

Bullish Bearish Sentiment.

As at 18/12/07 Bullish/Bearish Sentiment stood at 2.52. This is a high reading. That occurred early this week close to the bottom of the current downturn in the American market.

Adam Hamilton (Zeal), May 2003, suggests shorting a market when the BB Sentiment is over 2.

Looking back over the history it seems more likely that in a bull market (like the past few years) shorting when the BB ratio is over 2.6 is a better option. The BB Sentiment is close to that now. Any further upward movement in the market is likely to push it above the 2.6 level.

What is surprising is that we have a very bullish reading on the BB Sentiment when the market was at a low point.

Has the leopard changed its spots - and the newsletter writers have become good at picking market bottoms? Unlikely.

But it is still strange that we are getting such a bullish reading at this point.

This suggests to me that any upward movement in stock market prices will be short lived.

Cheers
Red