Sentiment Survey Talk

[tsptalk]

I closed the Sentiment Survey Results thread so that the results will be easy to see. We can use this thread to talk about the surveys or investor sentiment in general.

Thanks,
Tom

[tsptalk]

I did a little research with this year's sentiment survey and found some interesting results. I will probably write about it in Monday's (12/18/06) comments, but I wanted to share this cool development.

I made various automatic allocations based on the bulls to bears ratio of our Sentiment Survey.

Here's the interesting one...

- If the Sentiment Survey had a bulls to bears ratio of 2.00 or higher (overly bullish) I went 100% G fund for the following week.

- If the Sentiment Survey had a bulls to bears ratio of 1.25 or lower (overly bearish) I went 35% C, 35% S and 30% I fund for the following week.

- If the Sentiment Survey had a bulls to bears ratio between 1.26 and 1.99 (neutral) I just kept the same allocation as the prior week:.

The results thru 12/15/06: An account gain of 25.15%.

Trying another option:

Using the same criteria above, except instead of keeping the same allocation as the prior week, I moved to a 50% G, 50% C allocation when the bulls to bears ratio was between 1.26 and 1.99 (a neutral reading):

The results thru 12/15/06: An account gain of 21.16%.

As a comparison, here are the current totals of the funds thru 12/15/06:
<TABLE style="WIDTH: 354pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=474 border=0 x:str><COLGROUP><COL style="WIDTH: 59pt; mso-width-source: userset; mso-width-alt: 2889" span=6 width=79><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" width=79 height=17>G Fund</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=79>F Fund</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=79>C Fund</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=79>S Fund</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=79>I Fund</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=79>20% Each</TD></TR></TBODY></TABLE>
<TABLE style="WIDTH: 354pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=474 border=0 x:str><COLGROUP><COL style="WIDTH: 59pt; mso-width-source: userset; mso-width-alt: 2889" span=6 width=79><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; HEIGHT: 12.75pt; BACKGROUND-COLOR: #cc99ff" width=79 height=17 x:num="4.7491039426523239E-2">4.75%</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: #cc99ff" width=79 x:num="4.6860356138706656E-2">4.69%</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: #cc99ff" width=79 x:num="0.16457564575645744">16.46%</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: #cc99ff" width=79 x:num="0.16410571604179483">16.41%</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: #cc99ff" width=79 x:num="0.25469016486640139">25.47%</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 59pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: #cc99ff" width=79 x:num="0.13554458444597672" x:fmla="=((A1*20%)+(B1*20%)+(C1*20%)+(D1*20%)+(E1*20%))">13.55%</TD></TR></TBODY></TABLE>
Want more?

- If you used 100% G and 100% S instead of the split (35/35/30) allocation, the gain is 27.74%.
- Using 100% G / 100% I, yielded 23.95%.
- Using 100% G / 100% C, yielded 23.49%.

In all instances you would have made 16 interfund transfers during the year and, get this, you would have spent 28 of the 50 weeks in a 100% G fund allocation (no risk)!

Interesting, huh?

[Spaf]

I have a similiar spreadsheet set up using rokids weekly tally and the account thread.
Using the leaders, it gives out an averaged allocation and a Bull vs Bear percentage.
Individually the leaders are kind of hard to follow. But, as a group they are easy to follow and their direction is more pronounced.
If one or two are wrong it doesn't matter a lot, because the group survives.

It's kind of fun to listen to the funky doom and gloom of the outside market experts and then watch our leaders make them eat their words.

Spookey ain't it, must be a atmospheric phenomenon.......:eek:

[tsptalk]

One of our readers recommended a book to me last year called, The Wisdom of Crowds. It's very interesting and I think you are on to something Spaf.

The sentiment surveys are good contrarian tools used at extreme levels (which is sort of what I am doing above) but as a "crowd" we would not want to use the total data's average as a contrarian indicator, but as 'wisdom of the crowd' just like you are doing.

The concept, like you said, is that some will be right, some wrong, but as a whole they are a third entity that is very wise. Just like the market is wise and seems to know things even before they happen. I find sentiment and the pyshological angle of the market fascinating.

[Spaf]

I was supprised how easy it was to do. It takes me less than 5 minutes to tally the leaders allocations and update the spreadsheet. We are not going with the heard, we are going with the best of the heard.

The only draw back is that some post too close to the 12:00 EST deadline. You can talk to them about that.......:cheesy:

I also use the "best fund" as a factor in the average, kind of like the olive in the martini!

The "Tin Box" in the Market Talk weekly and Daily Yak thread will show their allocation average and how they appear as a percentage of Bulls v Bears.

My thinking; why reinvent the wheel!

[ATCJeff]

Tom are you going to back test the data further than 1-1-06? Not sure how long the survey has been around....

Jeff

[FUTURESTRADER]

very interesting...sounds potentially like a marketable strategy/system :)

[tsptalk]

Tom are you going to back test the data further than 1-1-06? Not sure how long the survey has been around....

Jeff
I have sentiment data going back to June 2005 so if I get a minute this weekend I'll add it to the spreadsheet and post the results.

To me, this is a confirmation of what we kind of already knew. But now we have a short-term, basic verification.

Maybe we can get this allocation added to the tracker for 2007 so people can follow it.

[FUTURESTRADER]

I have sentiment data going back to June 2005 so if I get a minute this weekend I'll add it to the spreadsheet and post the results.

To me, this is a confirmation of what we kind of already knew. But now we have a short-term, basic verification.

Maybe we can get this allocation added to the tracker for 2007 so people can follow it.

adding it to the tracker would be ideal

[ATCJeff]

I have sentiment data going back to June 2005 so if I get a minute this weekend I'll add it to the spreadsheet and post the results.

To me, this is a confirmation of what we kind of already knew. But now we have a short-term, basic verification.

Maybe we can get this allocation added to the tracker for 2007 so people can follow it.

Great idea.

[tsptalk]

Tom are you going to back test the data further than 1-1-06? Not sure how long the survey has been around...
The half year results from June 2005 (when the sentiment survey began) thru December 2005 were not as dramatic - Perhaps because it was new and fewer people took the survey.

- A bulls to bears ratio of 2.00 or higher = 100% G fund for the following week.

- A bulls to bears ratio of 1.25 or lower = 35% C, 35% S and 30% I fund for the following week.

- A bulls to bears ratio between 1.26 and 1.99 = same allocation as the prior week.

The results 6/13/05 - 12/30/05: An account gain of 6.02%.

<TABLE style="WIDTH: 240pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=320 border=0 x:str><COLGROUP><COL style="WIDTH: 48pt" span=5 width=64><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 48pt; BORDER-BOTTOM: #d4d0c8; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" width=64 height=17>G FUND</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 48pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=64>F FUND</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 48pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=64>C FUND</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 48pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=64>S FUND</TD><TD class=xl24 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; WIDTH: 48pt; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" width=64>I FUND</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; BORDER-BOTTOM: #d4d0c8; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" height=17 x:num="2.4793388429752025E-2">2.48%</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" x:num="5.6550424128181433E-3">0.57%</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" x:num="5.2836052836052957E-2">5.28%</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" x:num="0.1015572105619499">10.16%</TD><TD class=xl25 style="BORDER-RIGHT: #d4d0c8; BORDER-TOP: #d4d0c8; BORDER-LEFT: #d4d0c8; BORDER-BOTTOM: #d4d0c8; BACKGROUND-COLOR: transparent" x:num="0.1572368421052632">15.72%</TD></TR></TBODY></TABLE>

[Bullishreturn]

Or it could just mean that there were fewer monkeys, but equipped with more darts.

(Right? :-)

[Bullishreturn]

Tom- two things quickly about your results:

1. The change in the question may impact how people answer. For me- if the question TODAY is "Are you bullish or bearish" on a "weekly survey", then my mindset is you are asking about the next week, because the survey comes out every week. And right now I am neutral, because I think the week before Christmas will not spill any/much blood, and is likely to drift higher for the next few trading days due to Santa Claus.

Now, if the question is where do I see it 30 days from now, I'd have to say not neutral, but rather I'd say bearish, becuase I believe the market is overextended in general right now, and will shake out a good 6% down side over the next month, counter to the normal January ralley. But not because the market is weak, but simply because a retrace is overdue.

So that is #1.

#2 is - your first set of time frames in 2006 are not at all a usual reflection of the market. The market NORMALLY goes up, and goes down. 2006 has had a lot more time in the "up" phase than the normal market history over time. So you might not get the best data.

Well, we'll be happy to see how your new discovery works in real dollars. Put your allocation indication out on the board, and let's try it for a little bit. Take it for a test drive around the block. I've got two accounts- one civilian, and one military, and will be happy to put my military one (currently 100% in L2040) to the allocation and see how it works out.

[fabijo]

I have a similiar spreadsheet ...
Using the leaders, it gives out an averaged allocation and a Bull vs Bear percentage.
Individually the leaders are kind of hard to follow. But, as a group they are easy to follow and their direction is more pronounced.
If one or two are wrong it doesn't matter a lot, because the group survives.


That's what's great about this board, we can actually track people's returns and know if they are doing well or not. It is just too much trouble to sort through hundreds of websites and articles to find out what the market is doing. Just following the transactions of the best performers.

Do you know if there are similar people to follow outside of TSP?

[350zCommTech]

I'm not seeing this weeks' results.

[tsptalk]

I posted it a little late... Did you try hitting refresh?

[350zCommTech]

I posted it a little late... Did you try hitting refresh?

Yes I did, but it's working now. Thanks.

[HarryPotter]

Tom,
I lost track but you have missed a huge rally. You got out of Stocks when SP was at 1390 or so and has remained out. Now we are at 1430 that is nearly 3% and probably more in the S fund and I fund. I am beginning to think that following too many indicators too closely gets you nowhere. Do we need to revise strtegy based on performance of last 3 years and refine it more closely.
Trader FRED seems to be doing better when at the beginning of the year he came out with huge allocations to stocks.

[SkyPilot]

Potter... (or whoever you really are)

We've been over this ground before. Knock it off....

Tom,
I lost track but you have missed a huge rally. You got out of Stocks when SP was at 1390 or so and has remained out. Now we are at 1430 that is nearly 3% and probably more in the S fund and I fund. I am beginning to think that following too many indicators too closely gets you nowhere. Do we need to revise strtegy based on performance of last 3 years and refine it more closely.
Trader FRED seems to be doing better when at the beginning of the year he came out with huge allocations to stocks.

[Bullishreturn]

Potter said:....
Originally Posted by HarryPotter
Tom,
I lost track but you have missed a huge rally. You got out of Stocks when SP was at 1390 or so and has remained out. Now we are at 1430 that is nearly 3% and probably more in the S fund and I fund. I am beginning to think that following too many indicators too closely gets you nowhere. Do we need to revise strtegy based on performance of last 3 years and refine it more closely.




I'd say Tom is doing just fine. We're right about back to 1390, Tom made money safely in "G" while he was on the sidelines, and everybody is happy.

I'd say Tom hit is better that most people.

[Bullishreturn]

Note to self-

This is actually looking pretty good. The sentiment survey shows a buy. However, I'm going to wait a day and make sure things have bottomed out.

The one thing I noticed in this drop is that there was not a level of panic or dispair, only a little grumbling around the office. I think that means we just got a nice pause, and not the start of a bear market. Sentiment survey results help me in my decisions. It's good to see in real time.

[tsptalk]

Note to self-

This is actually looking pretty good. The sentiment survey shows a buy. However, I'm going to wait a day and make sure things have bottomed out.
I've noticed a delay in the market's reaction after the intial signal. In other words when we get a buy or a sell signal, somethimes it's the 2nd week that benefits most.

[tsptalk]

Here is the current 2007 return (thru 3/2/07) for the TSP Talk sentiment survey system...

http://www.tsptalk.com/images/sent_res.gif

Thursday's survey made the system issue a buy signal for this coming week.
The system is explained here... www.tsptalk.com/sentiment.html (http://www.tsptalk.com/sentiment.html)

[tsptalk]

Thru 3/9/07, the TSP Talk sentiment survey system is now up:

1) +4.71%
2) + 3.28%

[tsptalk]

The Sentiment Survey System moved to a sell signal for 3/26 to 3/30.

www.tsptalk.com/sentiment.html (http://www.tsptalk.com/sentiment.html)

[tsptalk]

The TSP Talk Sentiment Survey continues to cook; up 7.61% on the year. As I mentioned above, it went to a sell signal for this coming week.

http://www.tsptalk.com/images/sent_res2.gif

[Bullishreturn]

I am turning into a real believer on the sentiment survey as a trading tool.

It even seems to give you a day or two to make your moves.

[tsptalk]

Exactly! That was why I went to the Wednesday night / Thursday survey so we'd have the results on Friday morning in time to make a transfer.

[Wolverine]

Yes, very interesting with this sentiment survey. I am not looking at it closely enough yet though. But, will start getting with the program on this more as a tool of decision making I do believe.

[Show-me]

The survey is hitting a good lick. We can use it as a cross check or by itself. I am getting eager for Trader Fred to give a signal also. Very exciting!

[Bullishreturn]

Just curious Tom:

Did you close it earlier than usual tonight?

I thought it was usually up till thursday afternoon.


Thanks in advance, and I will be following the signal and moving out of stocks today, or, if there is still strength, tomorrow.

But it looks like today is my only chance- if they don't trade on friday.

[tsptalk]

Yes. We decided to post it a day earlier this week because of what you said. TSP won't be taking transfers Friday morning because of the market holiday - actually they will take them but they won't be effective until Tuesday if you do make a transfer on Friday.

By the way, did you see the commentary today about the AAII survey? Totally different story... www.tsptalk.com/comments.html (http://www.tsptalk.com/comments.html). Should be interesting.

[Bullishreturn]

Yes- conflicting sentiment surveys.

I wonder if "dueling surveys" mean anything. I'm in right now, but have to decide whether to obey the TSPTALK sentiment survey for the three day weekend period, or take the nod from the AAII survey and hold off till tuesday.

Decisions, Decisions..........

[tsptalk]

I have noticed that our survey sometimes gives early signals. That is, if we get a sell signal for the following week, the market might be flat that week, but the following week it goes down. Not always, but there is a tendancy. It would be nice if the market went straight down next week confirming this strong sentiment indicator, but it wouldn't surprise me if next week was up fractionally because of that delay - then down the next.

[tsptalk]

The sentiment survey system is now up 9.41% for the year and triggered a sell signal (100% G fund), which means it will be up another 0.08% next week.

This is our little secret. I will mention this in the comments now and then but I won't go crazy promoting it as it may affect the survey results.

[Show-me]

:nuts: Wow!:nuts:

[NyteTracker]

Tom,
Many Kudos for an awesome forum and website.
The Sentiment Survey has definitely caught my attention along with many others.
Last week it signaled a buy while most TSPers were bearish, hence the move to #2. :nuts:
I was curious about the YTD for the I Fund, so I calculated a quick spreadsheet.
If my figures are correct, the I Survey is up 10.45% this year, which would make it #1 in Rokid’s Account Tally. :blink: This is a huge credit to you and your email constituents, you are a wise group.
Thanks again, for your contribution to the TSP program.
:) :)

[tsptalk]

Interesting. I should have considered a 100% I fund option.

[tsptalk]

I take that back, I looked at my speadsheets from last year and the 100% S fund did beat the 100% I fund version of the system in 2006. That's why I stayed with the S fund for '07. According to NyteTracker, it looks like the I / G fund system may be doing better this year.

[tsptalk]

I have noticed that our survey sometimes gives early signals. That is, if we get a sell signal for the following week, the market might be flat that week, but the following week it goes down. Not always, but there is a tendancy. It would be nice if the market went straight down next week confirming this strong sentiment indicator, but it wouldn't surprise me if next week was up fractionally because of that delay - then down the next.
Just to follow up: The S&P 500 was up.63% this past week.

[USNAVYRETIRED]

The Sentiment Survey System moved to a sell signal for 3/26 to 3/30.

www.tsptalk.com/sentiment.html (http://www.tsptalk.com/sentiment.html)


tsptalk... When is the Sentiment Survey posted for the upcoming week? :confused:

[EW_ret]

It will post Friday morning to show the sentiment for the following week. The results thus far are 1.44 (46 Bull, 32 bear, 19 neutral) in today's survey. If this continues, the sentiment will be unchanged and remain a Sell for COB Friday, April 20th.

[USNAVYRETIRED]

Thanks!!!

[mlk_man]

Tom, question on the survey. For the week of 02/05/07 thru 02/09/07 the ratio was 1.70 and you have it as a buy. The week of 01/16/07 thru 01/19/07 the ratio was 1.70 and you have it as a sell. Shouldn't the week of 02/05/07 thru 02/09/07 have been a sell? This would make the sentiment tracker return even higher. ;)

[EW_ret]

When the Bull/Bear ratio is between 1.25 and 2.00 the sentiment is unchanged so there is no change in the recommendation for the following week. If the prior week's reading was Sell it remains a Sell, if the prior reading was Buy it remains a Buy. The transition from Buy to a Sell occurs when sentiment ratio changes to a reading of 2.00, or higher, from prior reading(s) below that number. The transition from Sell to a Buy occurs when sentiment ratio changes to below 1.25, from prior readings that were above that number.

[mlk_man]

Ahhhh, thanks. Guess I should of read deeper. Seems like if you bought or sold only depending on the 1.25 ratio it would still be doing quite well though.

[tsptalk]

It was interesting this week in that this past Wednesday night, a couple hours after I posted the survey, the early bull to bear ratio was 3 to 1. After the morning sell off on Thursday it moved down to the neutral 1.4 to 1 area.

Now that we are getting another big rally, I'd like to see where the survey stands so I put up another "unofficial survey (http://www.tsptalk.com/#1)" on the home page - just to satisfy my curiousity.

If this survey can be so fickle, perhaps we can get quicker buy / sell signals during the week to take advantage of peak bull and bear sentiment shifts during the week, and possiby make an even higher return. Of course that may be overkill and actually hurt returns, but it may be worth a try.

[southbeachrat]

Tom,
The Sentiment Survey has done well. I intend to put that in my bag of tricks for sure. Especially since I'm not doing so well this year (so far!).

I participate in the weekly mail vote, so my question is reference the poll that is posted "unofficially" on the message board. Do you use these results in the Sentiment Survey also? I don't want to vote twice and skew the results. Thanks for all you do.

Southbeachrat

[tsptalk]

Tom,
The Sentiment Survey has done well. I intend to put that in my bag of tricks for sure. Especially since I'm not doing so well this year (so far!).

I participate in the weekly mail vote, so my question is reference the poll that is posted "unofficially" on the message board. Do you use these results in the Sentiment Survey also? I don't want to vote twice and skew the results. Thanks for all you do.

sbr -
No. That one "unofficial" poll I took a week or two ago was unique (not added to other poll) and just for my own curiousity because if I remember correcty, the market took a big turn after the original poll was already over. I wanted to see how much sentiment changed because of the market's change. I am starting to wonder if the Wednesday night/ Thursday survey is too early since the results are very fickle and can change on a dime based on that day's market result.

Did anyone see this week's AAII survey? Unreal. 29% bulls, 54% bears. This is very bullish for stocks and bad news for those of us looking for a pullback.
<!-- / message --><!-- sig -->

[Wolverine]

sbr -
No. That one "unofficial" poll I took a week or two ago was unique (not added to other poll) and just for my own curiousity because if I remember correcty, the market took a big turn after the original poll was already over. I wanted to see how much sentiment changed because of the market's change. I am starting to wonder if the Wednesday night/ Thursday survey is too early since the results are very fickle and can change on a dime based on that day's market result.

Did anyone see this week's AAII survey? Unreal. 29% bulls, 54% bears. This is very bullish for stocks and bad news for those of us looking for a pullback.
<!-- / message --><!-- sig -->

Tom, if you could when you have time, explain what the AAII survey is, or, lead me to it.

The other thing here that is not quite clear for me is this 29% bulls vs 54% bears and you are saying this is bullish for stocks.

How can the high percentage of bears equal a bullish situation for stocks?

Not seeing this kind of math sitting well with the brain cells is all. LOL

Thanks for any explanation that will help clear this up.

Thanks To All.

[NyteTracker]

Good question Wolverine.
I was wondering the same thing.

[tsptalk]

Tom, if you could when you have time, explain what the AAII survey is, or, lead me to it.

The other thing here that is not quite clear for me is this 29% bulls vs 54% bears and you are saying this is bullish for stocks.

How can the high percentage of bears equal a bullish situation for stocks?

Not seeing this kind of math sitting well with the brain cells is all. LOL

Thanks for any explanation that will help clear this up.

Thanks To All.
I used to go over this often in my comments but I thought I started to sound like a broken record so I backed off. I guess it's about time again.

I'll use an extreme example to show the point of why these surveys tend to be contrarian in nature.

If there were 100 people who controlled the market, they were the only ones buying and selling, and all 100 were bullish, where do you think the market would go from there? Because they are bullish, they are likely already fully invested in stocks. So, who is left to buy? No one. At best the market would stay where it is, that is until someone decides that the market isn't going anywhere so they sell - and the market moves down a bit.

Then as the others see the tick down, they all start selling until at some point they are all bearish and have sold everything. Now they are 100% bearish and the market stopped going down (no more sellers), so it can now start to move higher again. Get it?

The AAII results come out late Wednesday nights on http://www.aaii.com/. It towards the bottom of that page.

[Bullishreturn]

Looks like we may have another big divergence from the AAII results today.

AAII is posting :

(as of 5/30/2007)
Bullish: 33.33%
Neutral: 21.88%
Bearish: 44.79%


Yet our TSPTALKERS are currently at:

Bullish (up) 66%
Bearish (down) 18%
Neutral 16%


Maybe the AAII was taken day before yesterday's big runup, and ours is still open now, but didn't start until after people saw the run up yesterday.....

Interesting.

I am watching ours closely today to see where we think we are headed. Fully invested, and life is good.

[tsptalk]

Thanks James. I was just going to post that. I didn't want to put it in the commentary this morning as it could have affected our survey results.

From what I understand, their polling is conducted on the AAII web site with a Wednesday cutoff and Thursday release. Unfortunately, that doesn't tell us exactly when they start.

[tsptalk]

Thanks James. I was just going to post that. I didn't want to put it in the commentary this morning as it could have affected our survey results.

From what I understand, the survey polling is conducted on the AAII web site with a Wednesday cutoff and Thursday release. Unfortunately, that doesn't tell us when it starts.

That AAII 33% bulls / 45% bears is a big old buy signal. As opposed to the early results of our survey which is showing a sell signal. Our surveys have been very good (as a contrarian play being up almost 12% to date) but seem to give early signals if anything.

[NyteTracker]

Wow!!
The Sentiment survey is going to be up huge this week.
They don't have a 4 day chart, but it looks like 2.25%.:blink:
http://money.cnn.com/quote/chart/chart.html?pg=ch&symb=95899W10&time=5dy&freq=15mi&charts=0&comp=efa&compidx=SP500%7E3377&ind_compind=&uf=0&lf=1&ma=0&maval=60
Thanks for the Survey Tom.

[tsptalk]

It's smarter than all of us. --- except Thunder :D

Next week it grabs the penny in the G fund.

[Bullishreturn]

I agree on the "ours gives us early signals" theroy- I've gotten out a couple days early on a couple of tsptalker survey signals- so I'm going to ride another day before looking again about making the trade.

Got my fingers crossed, I'm still 100% in, and I am hoping monday does us good too. (ebb's says stay in monday, so that is another of those signs to stay in. I think our tsptalker sentiment survey will be seen as predicting a tuesday or wednesday change next week).

Come on baby....papa needs a new pair of shoes .....(he says, as he rolls the dice some more, keeping that lucky string going...)

[Bullishreturn]

Only a couple times has a bull/bear ratio of over 3 to 1 been found in the tsptalker sentiment survery:


One year ago, on May 30, 2006, the ratio was 3.67 to 1. A week later, the S&P was down by 35 points, or 2.79 % Two weeks later, there was a buy signal.

06/12/06 - 06/16/06 41% 39% 1.05 -1 -0.06% 1251.54 260 B
06/05/06 - 06/09/06 55% 30% 1.83 -1 -2.79% 1252.30 S
05/30/06 - 06/02/06 66% 18% 3.67 -1 0.63% 1288.22 S


This was repeated this past December- when the ratio reached 3.22 to 1. A week later, the S&P had fallen 17 points, or 1.14%.


12/18/06 - 12/22/06 69% 14% 4.93 -1 -1.14% 1410.76 147 S
12/11/06 - 12/15/06 58% 18% 3.22 -1 1.22% 1427.09 158 S


Finally, back in January 2006, the ratio again went over 3 to 1 on this: The January 9, 2006 TSPTALKER sentiment survey hit 3.16 to 1 bulls, and the next week the S&P had fallen by 2.03% .

01/17/06 - 01/20/06 54% 27% 2.00 -1 -2.03% 1261.49 S
01/09/06 - 01/13/06 60% 19% 3.16 -1 0.17% 1287.61 S


If the same hold true, we are in for a correction (breather) of about 2 percent in the next week.

Let’s see what happens.

I will be moving 40% off to "G" on monday, and will be preapred to trigger more off to the side if tuesday or wednesday looks bad.

Fingers crossed....

[Bullishreturn]

Right on target so far.

"S" fund now crossing 2% below Monday's close.

We still have some momentum on the downside, though. Next stop is around 3% down, where it should level for a day. then we won't know if it will move higher boucing back, or lower to continue the loss.

[anthony]

When making my weekly plans, I like to compare a lot of different sentiment material and systems to whatever material I can read. So right now I watch Fred, Tom, Ebb, the TSP Sent.Svy and a handful of the TSPTalk "heavy hitters."

I'd like to add the AAII Sentiment Survey to my watchlist, but can't seem to find a place that posts the results on a regular basis.

The Street.com (http://www.thestreet.com/metrics/metrics.html) puts up "Sentiment Signposts" on its Metrics site, but the last time it was updated was 5/24. Maybe I'm not getting an update because I'm not a member or something.

Does anyone know a good place to get updated sentiment data like AAII? Is that data offered on the TSPTalk Premium Services? Thank you.

[Show-me]

I'm not sure. I googled it and here is the homepage.

http://www.aaii.org/

[Gilligan]

Tom,
Does the TSPtalk Sentiment Survey and the Investors Intelligence Survey normally agree? Also, what is the track record for the Investors Intelligence Survey?

[tsptalk]

Sorry Gilligan, I just saw this post. They do not agree. The II survey seems to be much less volatile. The TSP Talk survey is more jumpy and follows the AAII survey a little more but not always. Sometimes they are completely opposite (like today).

[Bullishreturn]

Well, that's a hoot.

Last shfit (from sell to buy) I decided to use sentiment survey as a major influence on my decision. I follwoed that, until I balied out earlier this week on my "fears" again.

And then, this morning, I decided to buy back on again.

Yet the sentiment survey is pointing the opposite.

Ya just can't win for losing, can you?

I keep telling myself- it's only money. And I've got 12-14 years to go before retirement.

Fingers crossed, and hope we go up from here now....

[tsptalk]

Last shfit (from sell to buy) I decided to use sentiment survey as a major influence on my decision. I follwoed that, until I balied out earlier this week on my "fears" again.

And then, this morning, I decided to buy back on again.

Yet the sentiment survey is pointing the opposite.

Ya just can't win for losing, can you?
That's the problem with sentiment surveys. They try to get you to buy when things look terrible, and sell when they look great. That's not always easy. You have to fight your instincts.

There have been many weeks where the survey was wrong and it tends to get you to want to stop following it, and that's when it starts to work again. :rolleyes:

So, it has been a great tool for helping us make decisions, but just going into the system's autopilot mode has paid off best so far. Only Thunder5 can disagree. :)

[tsptalk]

In the last 2 years there have been 7 other surveys that moved directly from a buy signal (a ratio of < 1.26 to 1) right to a sell (> 2.00 to 1), without a neutral reading in between, as we have this week.

The following week, 4 weeks showed a positive return and 3 were negative. The average return was -0.24%. The max gain was +0.63%. The max loss was -1.53%.

It will be a holiday week so I don't know if that makes a difference. Bottom line, a small gain may be all we can expect and that is why I will look to lighten up if the market rallies Monday and Tuesday of next week.

[tsptalk]

Interesting to note that the sentiment survey system, which is up 13.46% so far this year, has been out of the market more than in. It has been in the S fund for 13 weeks this year, and out of the market (G fund) for 14 weeks - Next week makes 15.

[anthony]

Tom, it's interesting how two sentiment systems can be so different in terms of number of weeks out of market vs. in the market, but still produce similar (and very good) results.

In addition to TSPTalk-SS, I watch AAII-SS as another sanity check for my moves (or more correctly put, when my nerves try to convince me to sell, they and Birchtree help me stay invested). They don't fluctuate much, making them more like longer term market trend following vice market timing or vice short-term trend following.

A quick check showed me that AAII was out of the market the first 9 weeks of the year (I assumed out of market from the start because I don't have end of 2006 data handy and the site is currently blocked for me). And they've been in the market for 19 weeks straight since 5 March (using <1:1 as a buy signal, >2:1 as a sell signal, and neutral as a hold signal). That 19 weeks includes being in the market next week with 1.33:1 neutral hold signal.

If I did the math right, they have a 12.09% return this year -- Not too shabby. Not as good you TSPTalkers, but still better than all TSP funds except the I, and would have landed them #12 on ATCJeff's decile rankings (http://www.tsptalk.com/mb/showthread.php?t=4555). :)

[tsptalk]

Anthony,
I watch that one closely too. Our system has a tighter range for buy and sell signals (< 1.26 -1 = buy, > 2 -1 sell) and may be the only difference in return. Here is a longer term weekly chart of the AAII...

http://www.tsptalk.com/images/aaii_weekly1a.gif
http://www.tsptalk.com/images/aaii_weekly1b.gif
Source = www.decisionpoint.com (http://www.decisionpoint.com)

[mlk_man]

Tom, as a reply to the sentiment survey being out of sync lately, I was thinking that with more people following our top returns members that eventually this would "taint" the sentiment surveys results. The survey is a contrarian indicator. If everyone "knows" what is going to happen, then perhaps its time to call it the "smart" money?

[tsptalk]

I thought that several months ago as the survey was off for a couple of weeks, but things seemed to come back to normal. The problem I see is that the results turn on a dime. If the market is down in the morning, the bears come out, and if we get an afternoon rally, the bulls jump back in. So for me to ask what people think about the "coming week", I'm thinking people are responding with what they think will happen in the next couple of hours. We'll have to see.

[Bullishreturn]

I still think our sentiment survey is very, very valid. We've been moving within a fairly tight range for the last month. A couple of ups and downs, for sure, but if that last switch was a "fake out" , as I mentioned in my post of June 29th, and should have been a move to stay in instead of bail out, then this week would be the move to a sell.


Ebb is on such a roll, it's hard not to try his system for a while. I think he's moving on pretty much all cylinders right now, so I'll go with the flow.

Unfortunately, all good systems seem to have their "ups and downs". As long as Ebb is hitting on every cylinder, I think I'll follow Ebb closer than I will follow Sentiment Survey. That doesn't mean Sentiment Survey is no longer useful, it just means it's Ebbs turn to bask in the sun for a while.

[buda]

yep made some money but took a tumble the past two days...

I figure it all evens out in the end.

ebb is hitting nicely just that the past few days were rough....don the thick skin and enjoy the ride....

[tsptalk]

The early results of this week's survey don't look good. It will go on for several more hours but if things don't change, we could be getting a sell signal for next week.

[ATCJeff]

The early results of this week's survey don't look good. It will go on for several more hours but if things don't change, we could be getting a sell signal for next week.

http://www.tsptalk.com/mb/showpost.php?p=108409&postcount=14

I saw this coming lastnight.:D

[Bullishreturn]

What a strange week.

We're at 1453, and the last buy was at 1433.

Is that correct?

[Bullishreturn]

So the sentiment survey has us still in a "buy" mode.

Good.

This morning, my wife asked me if we should move all the money OUT of the markets, because she is afraid the market is crashing. After all, all the talking heads on T.V. are talking about the big dive.

Another indicator to ME PERSONALLY that I should be buying more, not selling.

[tsptalk]

So the sentiment survey has us still in a "buy" mode.

Good.
Yeah. It was close. We were over 2 to 1 bulls to bears with 300+ votes, but it dropped to the nuetral 1.6 to 1 with 444. Kind of surprising considering the damage. You'd expect more bears during times like this.

[tsptalk]

This past week's buy signal didn't look too good but amazingly, the S&P was actually up 1.44% and the sentiment system rose 1.87% for the week being in the S fund, bringing it to +13.61% for the year. Compared to the funds:

<TABLE style="WIDTH: 279pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=370 border=0 x:str><COLGROUP><COL style="WIDTH: 46pt; mso-width-source: userset; mso-width-alt: 2230" span=5 width=61><COL style="WIDTH: 49pt; mso-width-source: userset; mso-width-alt: 2377" width=65><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" width=61 height=17>G Fund</TD><TD class=xl25 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=61>F Fund</TD><TD class=xl25 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=61>C Fund</TD><TD class=xl25 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=61>S Fund</TD><TD class=xl25 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=61>I Fund</TD><TD class=xl25 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 49pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=65>20% Each</TD></TR></TBODY></TABLE>
<TABLE style="WIDTH: 279pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=370 border=0 x:str><COLGROUP><COL style="WIDTH: 46pt; mso-width-source: userset; mso-width-alt: 2230" span=5 width=61><COL style="WIDTH: 49pt; mso-width-source: userset; mso-width-alt: 2377" width=65><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: #cc99ff" width=61 height=17 x:num="2.9888983774551632E-2">2.99%</TD><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: #cc99ff" width=61 x:num="2.0646319569120164E-2">2.06%</TD><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: #cc99ff" width=61 x:num="3.6328871892925566E-2">3.63%</TD><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: #cc99ff" width=61 x:num="4.3176972281449823E-2">4.32%</TD><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 46pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: #cc99ff" width=61 x:num="4.7704770477047811E-2">4.77%</TD><TD class=xl24 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 49pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: #cc99ff" width=65 x:num="3.5549183599018999E-2" x:fmla="=((A1*20%)+(B1*20%)+(C1*20%)+(D1*20%)+(E1*20%))">3.55%</TD></TR></TBODY></TABLE>

[Bullishreturn]

That sentiment survey is amazing.

I just can't bring myself to stay with it tomorrow, however, and I'm bailing out tomorrow.

I wish I had the guts to stay with it, but I am chickening out tomorrow.

[vectorman]

Amazing. Who would have predicted it? Still early, but S fund sure turned around.:)

[Bullishreturn]

Notice that the votes were only at 0.76%?

There are only two other times when we reached levels that low.

Once it was very accruate, and once it was not.

I think we still are going to get a lot of wave tossing over the next couple months, but I'm going to try and stick with the sentiment survey indications

[Gilligan]

This is the lowest reading (0.76) that we have had this year. In the last one and a half years we have only seen the reading this low or lower 3 times. All three had gains the following week. This week we have hurricane Dean, so its going to be an interesting week.

02/06/06 - 02/10/06 34% 45% 0.76 -1 0.23%

07/24/06 - 07/28/06 35% 46% 0.76 -1 3.08%

09/11/06 - 09/15/06 25% 54% 0.46 -1 1.61%


http://www.tsptalk.com/sentiment.html

[Bullishreturn]

Uh ro Astro.

Today's sentiment survey looking different.

Have you voted yet?

[Bullishreturn]

I think the survey may once again be a couple days ahead of the markets- I'm going to hang and see what monday morning brings before deciding whether to follow the survey to the sidelines.

[clester]

The survey is right again! Its a great tool. What will the next one bring. A buy a hope.

[Birchtree]

IFT for COB 8/29

6% I fund, 94% C fund

[Birchtree]

I have no idea how my IFT ended up in this thread. I did a pm to EW so we should be ok.

[clester]

Another positive week for the survey! Although C outperformed the S.

[Birchtree]

The C fund is composed of 30% financials and if rates are coming down so will the cost of money to financial companies - expect C fund to be the forward outperformer. Not many folks interested which is great.

[wv-girl]

It is interesting that the survey has a sell for next week when the seasonality chart shows all green for the week. Hmm. Will be an interesting week.

[clester]

Sell signal over 2-1 bulls two straight weeks. That seems a little scary.

[clester]

Sell signal 3 weeks in a row. Looking at the past data page, every time we had 3 sells in a row the third week did lose money. Sometime the survey is early, but you've got to consider 3 in a row.

[Bullishreturn]

Yes- three times in a row is a danger signal for me. I've moved 30% off the table to safety, anticipating a wild week ahead.

Japan is up now, so I am still leaving some in for Monday- but will examine again tomorrow night to see if it's time to take more off the table or not.

Sentiment survey has a darn good track record- good enough to pay attention to. It's usually a bit early, but three weeks in a row should be a sign.

[clester]

So far the 3rd week is the charm. Will we get a buy for next week? If this week continues down I'm sure we will and I'll be a buyer.

[clester]

I felt the bullishness last week. I use CNBC as my gauge. All the guests were pumping up the market. I think emotions will quickly turn negative with another day or two of selling. I hear that on CNBC already. Can't wait to buy that fear. But, be patient (I'm reminding myself). I want to buy today, but I should wait a couple of days I think.

[clester]

Even though we're still on a sell signal, the survey is very close to a buy and if today is down I believe the sentiment will drop more. Maybe, the survey is a little late? Hard to fight it though.

[clester]

I would say if we did the survey today it would be on a buy signal. Its tempting but scary to jump in today.

[clester]

I would say if we did the survey today it would be on a buy signal. Its tempting but scary to jump in today.
From looking at everyone going to G or F, I'd say we definitely have negative sentiment. Could be a good day to buy. High risk? yep. But IMO the downside is limited.

[Bullishreturn]

Just for grins- right now my gut is telling me there is far greater downside risk than upside risk right now. I['m thinking 1490 before a rebound, and I'm actually fond of "F" right now for at least the next week or so, and may be so for much longer.

Why?

1. 4 weeks on the sentiment survey sell signal;

2. The "structured investment vehciles" the banks are talking about do nothing but delay what is ahead- that is the real fallout from subprimes won't hit for a while yet, but when they do, there will be blood out there.

3. Price of oil is too high too fast, and will hurt pump prices in the weeks ahead.

4. Too good for too long. Nice pullback needed. These little upticks we've gotten the last month or two are just readjustments, not changes in direction. I smell changes in direction.

My 2 cents.

[Uptrend]

Time to buy fear. The sediment is going bearish. That is good for stocks

[clester]

After reading Tom's comments, I wonder if the negative comments from sentiment trader right before the poll will cause some bias. If today continues to be down (futures are down), that might also give us a negative bias. Therefore, I expect it to give a buy signal. In any case, it seems the survey has been a little early.

[Bullishreturn]

The survey doesn't close until late tonight.

We'll have the results friday morning, for a possible trade on noon friday (tomorrow) at the earliest.

Yes, you may be right on the comment influecing the voters, but I don't think that will influence as much as the downturn today does.

I look for the sentiment survey to switch to a buy soon-

[clester]

Looks like a strong buy signal. I've been hoping for one. The last 2 times we went below a 1.00 we had a great week.

<table style="border-collapse: collapse; width: 462px; height: 21px;" border="0" cellpadding="0" cellspacing="0"><tbody><tr style="height: 12.75pt;" height="17"><td style="border: medium none ; height: 12.75pt; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;" height="17"> 08/20/07</td> <td style="border: medium none ; color: black; font-family: Verdana,sans-serif; text-align: center; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> -</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 08/24/07</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 37%</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 49%</td> <td style="border: medium none ; color: green; font-family: Verdana,sans-serif; text-align: right; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 0.76</td> <td style="border: medium none ; color: green; font-family: Verdana,sans-serif; text-align: left; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> -1</td> <td style="border: medium none ; font-family: Verdana,sans-serif; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;" align="right"> 2.31%</td></tr></tbody></table>
<table style="border-collapse: collapse; width: 475px; height: 13px;" border="0" cellpadding="0" cellspacing="0"><tbody><tr style="height: 12.75pt;" height="17"><td style="border: medium none ; height: 12.75pt; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;" height="17"> 03/19/07</td> <td style="border: medium none ; color: black; font-family: Verdana,sans-serif; text-align: center; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> -</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 03/23/07</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 39%</td> <td style="border: medium none ; font-family: Verdana,sans-serif; text-align: center; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 40%</td> <td style="border: medium none ; color: green; font-family: Verdana,sans-serif; text-align: right; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> 0.98</td> <td style="border: medium none ; color: green; font-family: Verdana,sans-serif; text-align: left; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;"> -1</td> <td style="border: medium none ; font-family: Verdana,sans-serif; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;" align="right"> 3.62%</td> <td style="border: medium none ; font-family: Verdana,sans-serif; color: windowtext; font-size: 10pt; font-weight: 400; font-style: normal; text-decoration: none; vertical-align: bottom; white-space: nowrap; padding-left: 1px; padding-right: 1px; padding-top: 1px;" align="right">
</td></tr></tbody></table>
Can we do it again?

[Bullishreturn]

Yep- A nice solid buy signal.

Last sold at 1557, now buying back in at 1490.

This is a GOOD system.

[Stoplight]

Hmmmm....the "Survey" looks like it is taking a beating today ! So far, I'm glad I stayed on the sidelines through tomorrow to pick up the G penny...

Ain't this fun ??!!

Stop...

[Silverbird]

I haven't jumped yet either, but the week is still young.

[Bullishreturn]

Sentiment survey has proved itself on one count- it seems to be about three days to a week early in it's signals. It's been that way several times this year.

I tend to want to wait until the sentiment survey signals- which is a signal for me to perk up and pay attention- and then, after a few days, I like to follow the signal.

1490 remains a strong floor today. I like that too.

[clester]

Sentiment survey has proved itself on one count- it seems to be about three days to a week early in it's signals. It's been that way several times this year.

I tend to want to wait until the sentiment survey signals- which is a signal for me to perk up and pay attention- and then, after a few days, I like to follow the signal.
.
Agreed. At least on the sell signals it seems to be early. After today it seems to be true on a buy signal too. But, We have a strong signal as I posted above. I'm hoping for the same type of return this week.
I think 1490 is very strong support also. We bounced off that area 3 times now. As bad as the news was today we weren't down that much. Thats also a good sign. I think the down side is limited. We'll see. Tuesdays are a little scary though.

[clester]

Well the survey got back on the good side today! I expect the rally to continue the rest of the week unless we get several big up days. I think sentiment will turn pretty positive if that happens and maybe a sell signal for next week. I hope we don't though.

I'm impressed with the market. It won't stay down. The news lately has been terrible and we could have easily sold off a lot. It will be choppy, but I think we'll test 1550 on the S&P on this rally. We'll see.

[tsptalk]

Well the survey got back on the good side today! I expect the rally to continue the rest of the week unless we get several big up days. I think sentiment will turn pretty positive if that happens and maybe a sell signal for next week. I hope we don't though.
The survey would have to move to 2 to 1 bulls to bears which isn't very common the week directly after a buy signal is given. My opinion is that we will more likely see a neutral reading (between 1.26 and 1.99) and the system will stay on a buy signal next week by default. That is unless the Dow is up big again Wednesday and Thursday.

[clester]

Lots of doom and gloom today! That will seal the deal. Buy for next week.

[clester]

The "sky is falling" attitude is everywhere. But, the market is holding up well. Its hard to be a contrarian on days like this. I'm actually encouraged that it isn't worse. The news and the talking heads make it sound like the US economy is doomed. Economic news has actually been good. What will happen this afternoon? Its a wild ride!

[clester]

Sentiment survey has proved itself on one count- it seems to be about three days to a week early in it's signals. It's been that way several times this year.

I tend to want to wait until the sentiment survey signals- which is a signal for me to perk up and pay attention- and then, after a few days, I like to follow the signal.

1490 remains a strong floor today. I like that too.
Right on it. Looks like we were early. We blew through 1490:confused:. Bound to get a bounce tomorrow. I feel panic today.

[clester]

The VIX is a good indicator of fear in the market. It is now at a very high level and at the top of its uptrend channel. I expect a couple up days in the market bringing the vix to the bottom of its channel. (around 20).

[tsptalk]

Unless there is a major change this afternoon, we will have another big buy signal for next week. Current results - bulls 33% / bears 52%

[clester]

Sentiment is really bad. A technical strategist was on Fast Money and says we're going into recession. Talking heads are saying the sky is falling. This board has gone into bear mode. Lions and tigers and bears, oh no! Two weeks in a row with a strong buy signal is rare. Where will we go from here?
up? I think so. But what do I know.

[Bullishreturn]

With this much negativity out here, it's GOT to flip around.

I bought into the red today. Looking for a nice snap upward next week.

Got my fingers crossed.

Sentiment survye is right, it just was a little early, once again. Looks like we have to thrash around here for a while before getting a big Christmas rally this year.

that's ok. I'll be ready when Santa finally comes.

[clester]

The time is nigh, I think. Come on Santa!

[clester]

Huge sell signal 4-1. Will it be early again? We are overbought, but I think the rally could continue. A short pullback would be good for the market though. Maybe sell the news on tuesday?

[clester]

Looks like the survey has redeemed itself. The current buy signal has produced about a 1% gain(If I added right), plus todays probable gain of 1% or so for about a 2% gain . Whew! I was getting worried, but it always seems to work out if you stick with it. If we go to limited trades, this system may become a lot more popular.

[EW_ret]

Its actually produced a return of -0.93 % from COB November 2nd to COB December 6th. The Sentiment Survey had a return of -3.07% for November and +2.21% for the first four days of December through yesterday. This is a total return of 0.9693 X 1.0221 = 099072, or -0.9278%

[clester]

Where's the survey for this week? It should be interesting.

[clester]

Sentiment seems bad to me. I know I feel like we will go lower. So, we may get a buy signal this week.

[clester]

Bingo! Buy signal. Question is.. will it be early again.

[RunningFool]

It seems to be early from 1 to 5 days.

[clester]

I don't think it will be early this time. Looking for a rally today.

[clester]

We dipped a little below 1460 support, but we seem to be holding on pretty well. Today we start the santa rally.

[clester]

Sentiment seem very low. I heard recession, inflation, stagflation, and credit worries a lot this weekend and today. I'm getting worried;)

[clester]

Ok, so we were early again. I was expecting a rally this afternoon, but no dice. We are now very oversold and sentiment is bad. I think we are due for a rally tomorrow and maybe through New years. I know some are looking for 1410 for support. I hope we don't make it there.

[clester]

Finally the futures are green tonite!

[Bullishreturn]

There is a gap to fill in at 1430. Once we fill that gap, I see it reboudning significantly.

I see good days ahead. Perhaps just one more day down to fill in the gap. See my P&F chart school for more supporting data.

[clester]

There is a gap to fill in at 1430. Once we fill that gap, I see it reboudning significantly.

I see good days ahead. Perhaps just one more day down to fill in the gap. See my P&F chart school for more supporting data.

Is 1435 close enough?

[clester]

Is 1435 close enough?
Looks like it. Nice turn around today. It looked bad for awhile there.

[hessian]

Looks like it. Nice turn around today. It looked bad for awhile there.
Hey Clester,
I'd love to hear any opinion on following - one was observation you made below:
1435 did hold as resistance today - which is the top of the gap from the mid-Nov low.

Other Funds seemed to have found some resistance too...
The "I" (well EFA anyway) got confirmation at the mid-Nov low (2-days)!
Also "S" hit within 5 points of that same mid-Nov low.

Like Anidoc said, its difficult to find folks willing to talk, even speculate, about what is, or might be happening! :suspicious:

[clester]

Hey Clester,
I'd love to hear any opinion on following - one was observation you made below:
1435 did hold as resistance today - which is the top of the gap from the mid-Nov low.

Other Funds seemed to have found some resistance too...
The "I" (well EFA anyway) got confirmation at the mid-Nov low (2-days)!
Also "S" hit within 5 points of that same mid-Nov low.

Like Anidoc said, its difficult to find folks willing to talk, even speculate, about what is, or might be happening! :suspicious:
I think technically speaking to fill the gap we needed to go to 1432. We got close. I thought 1460 would hold, but nooo! If 1432 breaks we may go way down. A lot of technical indicators at a pivotal point. If we break here it will get ugly.IMO. Today was a huge blow to the bears. A midday reversal is very bullish. I think we go up from here. I'm hoping for over 1490 which is resistance.
I like to use the fund that has been performing the best during the last month or so. Right now that's the C fund. Some like to play the laggard thinking it will catch up, but I've seen the opposite to be true usually. The dollar is reversing, so thats hurting the I fund.

So, I'm biased, but I think we go up.
Disclaimer: My returns have sucked this year.

[the decider]

re:i fund
it found support at 78.00 also =38% retracement :)

[hessian]

Clester, Thank you for your perspective. Disclaimer: My returns have sucked this year, too. I'm sure I'm on a gamble this week, so I especially appreciate your added perspective (as confidence helping get me thru, but of course I'm still remaining vigilent).

One other question, Clester, to fill the gap, technically we would we only have to hit below the gap, intraday - not have to have close the day below, right??

BTW, Decider, thank you also for your reply on the I confirming "81.0" (2-days). Of course I'm hoping these supports hold and we go positive for a little while.
VR

I think technically speaking to fill the gap we needed to go to 1432. We got close. I thought 1460 would hold, but nooo! If 1432 breaks we may go way down. A lot of technical indicators at a pivotal point. If we break here it will get ugly.IMO. Today was a huge blow to the bears. A midday reversal is very bullish. I think we go up from here. I'm hoping for over 1490 which is resistance.
I like to use the fund that has been performing the best during the last month or so. Right now that's the C fund. Some like to play the laggard thinking it will catch up, but I've seen the opposite to be true usually. The dollar is reversing, so thats hurting the I fund.
So, I'm biased, but I think we go up.
Disclaimer: My returns have sucked this year.

[clester]

One other question, Clester, to fill the gap, technically we would we only have to hit below the gap, intraday - not have to have close the day below, right??


I think so ,yes. Just hit somewhere in the gap intraday would do it. I don't think we'll make it there though. I'm thinking positive, Up we go!:)

[hessian]

I think so ,yes. Just hit somewhere in the gap intraday would do it. I don't think we'll make it there though. I'm thinking positive, Up we go!:)

Hey Clester,
Just FYI,thinks maybe 1435 MAYBE was close enough to consider that gap having been filled (technically), - although I expect we'll all likely continue to have doubts at this. See his post at: <TABLE cellSpacing=0 cellPadding=0 border=0><TBODY><TR vAlign=bottom><TD>http://www.tsptalk.com/mb/images/misc/navbits_start.gif (http://www.tsptalk.com/mb/showthread.php?p=138619#)</TD><TD></TD><TD width="100%">TSP Talk Forums (http://www.tsptalk.com/mb/index.php) > TSP Strategies (http://www.tsptalk.com/mb/forumdisplay.php?f=6) > Technical Analysis (http://www.tsptalk.com/mb/forumdisplay.php?f=46) </TD></TR><TR><TD class=navbar style="FONT-SIZE: 10pt; PADDING-TOP: 1px" colSpan=3>http://www.tsptalk.com/mb/images/misc/navbits_finallink_ltr.gif (http://www.tsptalk.com/mb/showthread.php?p=138619) P&F Chart School </TD></TR></TBODY></TABLE>

(Just wish to try to return yesterday's favor maybe.)
Much Thanks:)

PS Still trying to figure out today/what happened -if anything -trending up/trending down!
VR

[clester]

Hey Clester,
Just FYI, James thinks maybe 1435 MAYBE was close enough to consider that gap having been filled (technically), - although I expect we'll all likely continue to have doubts at this. See his post at: <TABLE cellSpacing=0 cellPadding=0 border=0><TBODY><TR vAlign=bottom><TD>http://www.tsptalk.com/mb/images/misc/navbits_start.gif (http://www.tsptalk.com/mb/showthread.php?p=138619#)</TD><TD>

</TD><TD width="100%">TSP Talk Forums (http://www.tsptalk.com/mb/index.php) > TSP Strategies (http://www.tsptalk.com/mb/forumdisplay.php?f=6) > Technical Analysis (http://www.tsptalk.com/mb/forumdisplay.php?f=46) </TD></TR><TR><TD class=navbar style="FONT-SIZE: 10pt; PADDING-TOP: 1px" colSpan=3>http://www.tsptalk.com/mb/images/misc/navbits_finallink_ltr.gif (http://www.tsptalk.com/mb/showthread.php?p=138619) P&F Chart School </TD></TR></TBODY></TABLE>

(Just wish to try to return yesterday's favor maybe.)
Much Thanks:)

PS Still trying to figure out today/what happened -if anything -trending up/trending down!
VR
Looks like 1435 was close enough. The survey got it right again (being out for the loss and back in for the ride up). I think we may have several more weeks before we get another sell signal. Even though its early sometimes, it seems to work out if you play the whole week.

[clester]

The survey had a great year. Thanks Tom for keeping up the survey.

Its a great tool. Just look at the results. We've had a lot of very low readings since Nov. Most weeks being 1 or below. I'm sure this week will be no different. Things seem pretty bad to me.
It will be interesting to see how we do this year. The survey would be a great way to trade if we have trade limitations and it's quick and easy, just check it out on Friday mornings.

[clester]

The survey had a great year. Thanks Tom for keeping up the survey.

Its a great tool. Just look at the results. We've had a lot of very low readings since Nov. Most weeks being 1 or below. I'm sure this week will be no different. Things seem pretty bad to me.
It will be interesting to see how we do this year. The survey would be a great way to trade if we have trade limitations and it's quick and easy, just check it out on Friday mornings.
I spoke too soon! But, its still early. One thing I'm considering is that if we are in a bear market the survey may stay on a buy signal too much and therefore hurt its returns. We don't have data for the 2000-2003 time frame when the market was in a downtrend. In other words, it may not be the best system in a bear market.

[Viva La Migra]

AAAAAAAAAAAAAAAAAAAAARRRRRRGH!!! I followed the survey and bought the S fund WAY too early!:mad: Does anyone know where the bottom of this freefall is?

[poolman]

AAAAAAAAAAAAAAAAAAAAARRRRRRGH!!! I followed the survey and bought the S fund WAY too early!:mad: Does anyone know where the bottom of this freefall is?

1360 is next support level on S & P.

Blew right through 1410

[RunningFool]

I spoke too soon! But, its still early. One thing I'm considering is that if we are in a bear market the survey may stay on a buy signal too much and therefore hurt its returns. We don't have data for the 2000-2003 time frame when the market was in a downtrend. In other words, it may not be the best system in a bear market.

I was thinking the same thing. It seemed to work fine until Jan 1 then its all down hill. It did the same thing back in Aug but recovered quickly. Maybe it will again. the only thing is the market seems to be in a downtrend now. :confused:

[clester]

I'm right at the point of bailing out. If we were down today I would have. So, luckily we're up. Sentiment is terrible. No positive talk on TV. It's the end of the world. Was yesterday the wash out? Today is most important. 1375 will be the last straw.

[RunningFool]

I suppose it will wait until after the 12:00 cutoff to crash and burn to keep us in the market.:(

[clester]

This weeks survey should be interesting. Are there any Bulls left?

[Silverbird]

I thnk the Sentiment Survey is predicting things well, *except* I consider "Buy" to mean "Hold or Buy". I do not expect the Survey to "know" exactly when to buy, since as everyone knows buying exactly at the bottom of the cycle eludes even the best of market watchers, it's every investor's decision on when they are ready to jump in.

[clester]

I'm right at the point of bailing out. If we were down today I would have. So, luckily we're up. Sentiment is terrible. No positive talk on TV. It's the end of the world. Was yesterday the wash out? Today is most important. 1375 will be the last straw.
Glad I held on!

[Frorule]

I was thinking the same thing.

Same here. One can imagine the survey is going to be of little assistance during a down market. Seemingly every week will be a buy week as it continues to tank. Not good.

[Frorule]

Does anyone know where the bottom of this freefall is?

I bet it blows past 1360 and drops to around 1300 before all is said and done. :(

[clester]

We are nearing capitulation. I see everyone heading for the door (including me). Survey is at lowest point since Tom started it. Are we near the bottom?

[Wrngway]

Earlier there was talk of looking into adjusting the ratios for a market that's in decline. Has anyone been following that or doing any backtesting over the last couple of months?

[bolo]

Does Anyone Believe Stocks Will Go Up Next Week With The Fed Rate Cut?

[Silverbird]

Does Anyone Believe Stocks Will Go Up Next Week With The Fed Rate Cut?
:worried: 1) Will there be a rate cut?
2) If there is, will it be enough to make Wall Street happy?
3) Will it be too much and get Wall Street worried and set the dollar on another dive?
4) Will it be too small and/or already factored in and Wall Street just does a little shrug up and down?

Lots of questions, sorry no answers. I'm hoping small to no cut since they did the loan package this week.

[Birchtree]

The Fed will do 50 basis points on the funds rate as well as 50 basis points on the discount rate and the Libor rate will drift below 2.50. The market will rally as there is recognition that there is no longer a liquidity crisis at hand.

[robo]

Don’t use just Sentiment in a Bear Market. However, Sentiment Extremes are rare, and we are close to or at one.

Robo

"True sentiment extremes are relatively rare events."
Jason


Q&A with Jason Goepfert
Thursday, March 13, 2008 at 3:03 PM

There are very few people or resources I try to read every single day, but Jason Goepfert’s research and commentary is the exception.

Many of you are already aware of Mr. Goepfert as I’ve previously shared some of his unique research with you in the past (see this previous post from last October). He is the leading expert in investor sentiment and mass psychology and his subscription-based website, SentimenTrader, is one of my personal favorites.

Mr. Goepfert’s ability to find and identify historical comparisons to the current market is both useful and unique. Over the many years I’ve read his analysis, I am routinely amazed by his uncanny ability to compare and contrast the current market situation to times in the past in order to obtain an significant edge in the market. While the future is always unknown and uncertain, traders who use historical analysis and who obtain a correct understanding of current market psychology, have a tremendous edge. That’s what Mr. Goepfert’s daily research and commentary is all about.

We hope you enjoy this Q&A!

Kirk: As you know, there are lot of people who think that they understand current market sentiment and how it relates to future market performance. However, there are a lot of conflicting opinions out there even though many people use and access the same data. In your view, where do many experts make mistakes when trying to evaluate and incorporate sentiment analysis?

Goepfert: The biggest mistake, bar none, is that the vast majority of folks form an opinion, then search out whatever indicators help to confirm their view.
I try my hardest to take the opposite approach. I look at everything we follow, then try to figure out what that most likely means in terms of risk/reward going forward. I am agnostic when it comes to the market, and will sell short just as easily as go long depending on what the studies say is most likely to succeed with the least risk.
I also think traders and investors glom on to one or two indicators, and call it good. That’s a big mistake, too, since that particular indicator may not fit their time frame or the current market environment. We also see market dynamics changing constantly, which impacts various sentiment indicators, and that must be taken into account as well.

Kirk: You often read and hear others say (including me at times) that the market currently believes something will happen, and as a result, you should expect something else. For example, if investors are very bullish, you should expect the market to fall and vice versa. What is your view of contrarian analysis and its usefulness for the average investor?

Goepfert: I think it’s useful, and it’s my basic approach to the broader market.
But (and this is a big “but”) there’s a difference between being contrarian because that’s what all the data and studies suggest, and being contrarian just because the neighbor said he mortgaged the house and bought call options.
Anecdotal evidence like magazine covers or the level of CNBC cheerleading can be helpful at times, but I think folks try to read something into everything. True sentiment extremes are relatively rare events.

Kirk: Many traders use technicals. Many investors use fundamentals. And, of course, there are many that use both. In your opinion, should sentiment analysis be used in isolation or should it only be used to compliment their other approaches?

Goepfert: I always tell people not to use the stuff we follow on a stand-alone basis. I think sentiment analysis is vitally important, but should also be used in conjunction with other technical and fundamental data to form a well-rounded trading philosophy.
Oftentimes the data will conflict (when the charts look the worst is often when sentiment looks the best), and that’s unavoidable, but when they line up, it’s time to press bets. The best combination for me is using sentiment as a setup, then some technical formation as a trigger for entry and exit.

Kirk: Compared to fundamental and technical analysis, does sentiment tend to fail more or less often?

Goepfert: Well, I would say it fails the least of all the other disciplines, but I’m impossibly biased.
It really depends on what one uses any of them for, and the time frame in which they’re used. Fundamental analysis has had some spectacular failures, but someone who can buy a deep value stock and hold it for 10 years probably thinks the failure rate is pretty low.
There is a whole segment of technical analysis that focuses on pattern failures, which I find kind of ironic. Historical testing of technical patterns has not turned out too much that is consistently successful on a stand-alone basis, both in academic studies and my own personal testing.
Sentiment failures are not as common, but they do happen, and again it really depends on what one is looking at to determine what constitutes a failure. I’m pretty strict about testing things, so it’s usually pretty easy to tell whether something is failing or not.
Context is very important, too – excessive pessimism conditions during a bull market is going to give you better results than the same conditions during a bear market, so I always take that into mind when considering how likely a trade is to fail.

Kirk: In your opinion, can very part-time investors find sentiment analysis helpful?
Goepfert: Sure, as long as they don’t get overwhelmed. Like fundamental and technical analysis, there are a lot of indicators available to try to judge sentiment.
My suggestion for those with a longer time frame and/or limited time would be to do some initial study, or request assistance from someone with good experience, to find a handful of indicators that can help them judge whether sentiment in general is suggesting an opportunity is at hand.
The failure rate may be a bit higher, but a lot of this stuff is redundant and an investor doesn’t need to pour over hundreds of indicators to get a feel for whether we’re at an extreme or not.


Kirk: Finally, if you had one piece of advice to share with all investors, what would it be?

Goepfert: Don’t take what you read – from me or anyone else – at face value. If you know someone, or have found them to be consistently reliable, then you can relax a bit, but in the general media there is a whole lot of disinformation (intentional or not), and even more sloppy research. People have agendas and narrow points of view, so that should always be a primary concern when you’re reading something. If at all possible, try to verify and test what you read if it’s intriguing enough to you, before you let it have an impact on your decisions.



You must become a member to read the entire interview. It will not cost much and it’s done by donation. The Kirk Report is a daily read for me. I also get Jason's service and find it one of the best I have ever had.

http://www.kirkreport.com/membersonly/ message from the following list:


http://www.sentimentrader.com/

[Bullitt]

Sentiment levels have been at a buy for the entire trading year of 2008. Unfortunately, just like anything else in life, there is no silver bullet. Oversold can remain oversold, and overbought can remain overbought. One of the great market paradoxes is buy low, sell high. How low is low and how high is high? This is one reason why I personally rely on a mix of sentiment and basic technicals in my decisions and use the news as a means to keep up with current events. Maybe some day I'll look back in the rearview mirror and to see that it actually worked.

The AAII is actually a surprisingly reliable indicator for those with a 5-10 year horizon. It is interesting to note that the sentiment of the S&P 500 is flashing a stronger buy signal today than it was during in the 2003 bottoming process. From www.marketgauge.com (http://www.marketgauge.com)

http://tal.marketgauge.com/dvMGPro/Charts/CAAIISR.GIF

[Silverbird]

Maybe just me, but the sentiment survey this time appears to say that we are all equally confused. 44% bulls to 44% bears, and I don't think that we can average it out and say it's going to be flat...

[James48843]

I think it's a pretty sure bet that it's not going to stay flat next week.

[Scout333]

Hello gurus and market prognosticators! I have been riding the S Train lately and watching the C and I lag behind. This sometimes indicates an opportunity in these funds. Any ideas whether this might be one of those times or just another trap? Any thoughts?:)

[tsptalk]

If the dollar keeps rising, the I fund could lag. If banks and larger financials, which are oversold, are able to rebound, the C fund might make a move, but that might not be a long term play.

Just somethings to consider. Good luck!

[Steadygain]

Hello gurus and market prognosticators! I have been riding the S Train lately and watching the C and I lag behind. This sometimes indicates an opportunity in these funds. Any ideas whether this might be one of those times or just another trap? Any thoughts?:)

The activity of the C and S Fund almost exactly match.

Major difference from my perspective is that S and I are probably more near where you would expect the short term top to be; whereas the C Fund has far more short term potiential gain. It is presently no where near where you would expect a short term top to be.

Unfortunately VOLUME has been very poor - so we are all having to hedge bets against the small fry investors (which are still significant enough to push the funds up at least 3 to 5%).

I'm more using the S&P 500 to guage stability and feel out the best entry and exit points. Today looks like the first real evidence of C Fund stability in a week or more and so I'll likely go in 100%. At this point we need to focus on "upbeat" or "downbeat" trends since we need to stay in a good week for each ITF.

Hope that helps. Just noticed Tom and I were writting at the same time - said pretty much the same thing.

[Scout333]

Thanks guys, That gives me something to think about.:)

[clester]

Seems we're getting pretty bullish. This as high as we have been since last year! Still not 2 to 1 or anything, but bullish for the position the economy is in. Maybe this will lead to a short rally. Or, should we sell?

[Frixxxx]

Seems we're getting pretty bullish. This as high as we have been since last year! Still not 2 to 1 or anything, but bullish for the position the economy is in. Maybe this will lead to a short rally. Or, should we sell?
No offense, but how bad was last year for you? I'm still showing about 33% down this year across the boards?:suspicious:

[clester]

No offense, but how bad was last year for you? I'm still showing about 33% down this year across the boards?:suspicious:
Very bad! What's your point?

[James48843]

Maybe the actionable data should be- that once we are in a defined "BEAR" market, then the sentiment survey results are opposite- i.e. when the pack is all bearish, in a bear market, then we stick with the bear.

This will come in handy someday. It may be at the end of the next bullish cycle, but someday, nonetheless.

Food for thought, anyway.

[tsptalk]

I plan rework the data to incorporate the 50-day moving average being above or below the 200-dma, or the slope of the 200-dma. This will change the buy / sell ratios points. I will start it in January.

[tsptalk]

I plan rework the data to incorporate the 50-day moving average being above or below the 200-dma, or the slope of the 200-dma. This will change the buy / sell ratios points. I will start it in January.
Very interesting results:

This year (thru 11/14/08) the sentiment survey system is down 42.85% as it has been in the S-fund the entire year because of the overly bearish sentiment.

A minor adjustment to the buy / sell ratios when the 50-day moving average dips below 200-day moving avegae, and the system would be down "just" 10.91%. And it was actually < 2% before last week.

One more "tweak"... If we use the less volatile 100% C-fund instead of 100% S when on a buy signal, and the 50-day MA is below the 200-day MA, the return becomes -7.07% (<1% before last week).

I'll keep a watch on this and probably use this method in 2009.

[XL-entLady]

A minor adjustment to the buy / sell ratios when the 50-day moving average dips below 200-day moving avegae, and the system would be down "just" 10.91%. And it was actually < 2% before last week.

One more "tweak"... If we use the less volatile 100% C-fund instead of 100% S when on a buy signal, and the 50-day MA is below the 200-day MA, the return becomes -7.07% (<1% before last week).

I'll keep a watch on this and probably use this method in 2009.

Adding the moving average chart signals to empirical data seems like a very interesting refinement. We will be watching with interest, and we thank you as always for your excellent work!

Lady