Wednesday, August 18, 2004

The widely-watched Investor's Intelligence sentiment survey came out with its latest results showing 43.6% bulls (down from 48.4%) and 28.7% bears (up from 24.2%).  This is the biggest drop in bullishness in a while, and the survey is now about where it was at the lows in May in terms of overall opinion.  It is not showning what I would call an extreme in bearishness by any measure, but it's a big (and good) change from what we saw in June. The lowrisk.com survey also came out, and its results were essentially unchanged from last week.  The 4-week moving average of this data, as posted to the site, is still sitting in extreme territory, suggesting that population at least is about as bearish as at any other time over the past 7 years. The change in I.I. is another good sign.  Many are waiting for the survey to reach the extremes it did at the lows in 2002 and 2003, but we have to remember that these are newsletter writers.  They traditionally do not do as well attracting subscribers by giving bearish opinions (even if they turn out to be correct, oddly enough).  So as we saw in 2000 and 2001, it will take some time for these guys to become truly bearish - likely another protracted bear market.  I would like to see a less bullish attitude from them, but considering the market environment we have seen over the past year and a half, the fact that it's now around the May lows gives a small degree of comfort. 8:56:55 AM