Use access key #2 to skip to page content.

Everybody is a contrarian indicator!! What is the actual sentiment like?

Recs

30

August 22, 2010 – Comments (32)

I am bearish. I point to the bearish macro. I point to the number of bullish posts and use it as a contrarian indicator.

You are bullish. You point to the bullish macro. You point to the number of bearish posts and use it as a contrarian indicator.

This is (obviously) a dumb game involving confirmation (or non-confirmation) bias. We will each seek out posts to prove our points regarding the level of sentiment. So instead of playing a dumb game, how about actually looking at a few sentiment measures? Here are are the two biggest (Equity Put/Call ratio and the VIX) and a slightly less well-known one (Bullish percentage of SPX stocks), with a 5 year history to put them into perspective.

I could also drag out a bunch of investor sentiment surveys and they would say materially the same thing. But those are less useful, because they rely on what people say and not what they do. These are measures taken directly from the market, and are a measure of investors actions.

Feel free to interpret however you want (I give my opinion on the chart), but I would suggest using numbers instead of "there are so many blogs that are [bullish/bearish] that it must mean we are going [down/up]".



ENLARGE

32 Comments – Post Your Own

#1) On August 22, 2010 at 6:06 PM, scruffy4life (75.90) wrote:

Scruffy approves of this post.

Report this comment
#2) On August 22, 2010 at 6:09 PM, binve (< 20) wrote:

scruffy4life ,

HATTIE: Enough talk. It's time for action. I move that everyone come to my apartment to snuggle my cat.

SCRUFFY: Second.

FARNSWORTH: I move that your cat stinks and is ugly.

SCRUFFY: Second..

 

Report this comment
#3) On August 22, 2010 at 6:36 PM, allstarvulture (< 20) wrote:

Allstarvulture approves of Scruffy references.  And of this post. 

Report this comment
#4) On August 22, 2010 at 6:42 PM, binve (< 20) wrote:

allstarvulture,

HATTIE: I move that we vote on a new Chief Executive Officer and oust this old creep. And also that make cat smells good and is pretty.

[Scruffy thinks.]

SCRUFFY: Second.

 .... :) Thanks ASV :)..

Report this comment
#5) On August 22, 2010 at 6:43 PM, xuincherguixe (< 20) wrote:

I think some people don't understand the difference between being a Contrarian Investor and just being Contrary.

Report this comment
#6) On August 22, 2010 at 6:56 PM, binve (< 20) wrote:

Lucille: If that’s a veiled criticism about me, I won’t hear it and I won’t respond to it.

Report this comment
#7) On August 22, 2010 at 7:12 PM, BearishKW (< 20) wrote:

#5) On August 22, 2010 at 6:43 PM, xuincherguixe (< 20) wrote:

I think some people don't understand the difference between being a Contrarian Investor and just being Contrary.

 

/thread

Report this comment
#8) On August 22, 2010 at 7:14 PM, BearishKW (< 20) wrote:

#5) On August 22, 2010 at 6:43 PM, xuincherguixe (< 20) wrote:

I think some people don't understand the difference between being a Contrarian Investor and just being Contrary.

 

/thread

Report this comment
#9) On August 22, 2010 at 7:34 PM, blesto (31.79) wrote:

I dunno, I think the chart needs some blue and purple lines.

Report this comment
#10) On August 22, 2010 at 7:39 PM, binve (< 20) wrote:

blesto,

Maybe some puce and vermillion too? I am going to ask stockcharts to add the 'crayola 64' colors to the drawing palate .... :).

Report this comment
#11) On August 22, 2010 at 7:40 PM, whereaminow (22.93) wrote:

Interesting charts.  I've never concerned myself with "sentiment" either way.  Don't plan on starting.

I have noticed one thing though.  I call it my Drudge Report contrarian indicator. ;)

(I suppose it would work for other rags too, but I don't read those.)

David in Qatar

Report this comment
#12) On August 22, 2010 at 7:45 PM, binve (< 20) wrote:

whereaminow,

>>Interesting charts.  I've never concerned myself with "sentiment" either way.  Don't plan on starting.

Fair enough. But for those that do, it is sloppy to just look for blog posts as your measurment indicator (which I see a lot of people doing). There are more rigorous ways to go about it.

>>I have noticed one thing though.  I call it my Drudge Report contrarian indicator. ;) (I suppose it would work for other rags too, but I don't read those.)

LOL! Nice :) ..

Report this comment
#13) On August 22, 2010 at 7:56 PM, MegaEurope (< 20) wrote:

These 3 sentiment indicators currently seem to be in the normal range.  I don't see that they suggest any particular action.

Report this comment
#14) On August 22, 2010 at 7:57 PM, binve (< 20) wrote:

MegaEurope ,

Fair enough.

Report this comment
#15) On August 22, 2010 at 7:59 PM, whereaminow (22.93) wrote:

binve,

But for those that do, it is sloppy to just look for blog posts as your measurment indicator (which I see a lot of people doing). There are more rigorous ways to go about it. 

Agreed.  And you're right about it being confirmation bias.  There's a lot of blogs out there.  I don't even know how one would begin counting them all, let alone determining the level of bullish/bearish-ness of each individual blog.  Sounds like pseudo-science. 

David in Qatar

Report this comment
#16) On August 22, 2010 at 10:40 PM, nuf2bdangrus (< 20) wrote:

I lost money being stubbornly bearish or bullish.  Now I just let the tape talk....always being short something and long something.  I like to buy and trade deep  value...and keep it simple.  Buy TSO under 11  Buy WNR under 4.40  VLO under 16.  they will bounce soon enough.  If you have limited capital, then buy in the money calls.  I'm about to get short the yen.  And add to my retail sector short.

Report this comment
#17) On August 22, 2010 at 11:08 PM, rofgile (99.25) wrote:

What do CAPS blogs have to do with the Bullish or Bearishness of the investing world overall?  Do you REALLY think we are a good sample to make any conclusions?

Do you think Alstry's viewpoints are widespread outside of CAPS?

---

I wouldn't make any conclusions about the market sentiment from idle talk found within CAPS blogs.  

 -Rof 

Report this comment
#18) On August 22, 2010 at 11:36 PM, binve (< 20) wrote:

nuf2bdangrus,

>>I lost money being stubbornly bearish or bullish.  Now I just let the tape talk..

That is a very reasonable position.

>>I'm about to get short the yen.

That is a very interesting position. Thanks!

rofgile ,

>>What do CAPS blogs have to do with the Bullish or Bearishness of the investing world overall?

Nothing, per the point of this post

>>Do you think Alstry's viewpoints are widespread outside of CAPS?

No I don't, (and I sure hope I'm right)..

Report this comment
#19) On August 22, 2010 at 11:52 PM, DarthMaul09 (29.80) wrote:

The grafts appear most helpful at the extremes (yellow bars = caution, consider selling soon) but in between we get some help as well.  Based on past performance, we do not appear to be in an obvious buying or selling opportunity.  The market trend is down but the grafts don't suggest  that we are near a cliff yet.

I like that the data is based on what trades are actually made, which I thinks makes the numbers more believable, as opposed to surveys or government estimates.

I encourage you to post updates, like the Porte grafts.  Even if it is somewhat irrational, seeing that the grafts don't place us at extremes in the market is comforting.

Report this comment
#20) On August 23, 2010 at 12:00 AM, binve (< 20) wrote:

DarthMaul09,

Hey man!

>>I like that the data is based on what trades are actually made, which I thinks makes the numbers more believable, as opposed to surveys or government estimates.

Analysts lie, Wall St. lies, but the numbers don't lie.

>>I encourage you to post updates,

Will do! Thanks!..

Report this comment
#21) On August 23, 2010 at 10:11 AM, Valyooo (99.46) wrote:

Binve,

Nice Arrested Development reference!

Report this comment
#22) On August 23, 2010 at 10:16 AM, binve (< 20) wrote:

ValyooRLholdings ,

LOL! Thanks :) Nice catch. Arrested and Futurama are probably two of my favorite series of all time. Good good stuff :)

Did you see this one? http://caps.fool.com/Blogs/some-say-wealth-is-an/392468 ... :).

Report this comment
#23) On August 23, 2010 at 10:49 AM, outoffocus (23.20) wrote:

Hey you guys be careful with the Futurama references. One player already got banned over it. O.O

SCRUFFY: MARMALADE...

Report this comment
#24) On August 23, 2010 at 10:51 AM, binve (< 20) wrote:

outoffocus,

>>Hey you guys be careful with the Futurama references. One player already got banned over it.

All glory to the Hynotoad! .... :)..

Report this comment
#25) On August 23, 2010 at 11:35 AM, Valyooo (99.46) wrote:

Haha nice, my favorite is "I understand more than you'll....never know"

Report this comment
#26) On August 23, 2010 at 11:38 AM, binve (< 20) wrote:

ValyooRLholdings,

Tobias had some of the best lines in the show.

"You've made some tremendous strides"... [reaching out his hand] :)..

Report this comment
#27) On August 23, 2010 at 11:57 AM, zzlangerhans (99.80) wrote:

I use my own sentiment as a contrarian indicator. If I wake up feeling bullish, it gives me a bearish perspective, which in turns leads to a bullish outlook. Generally by 9:45 I have vomited on my keyboard.

Report this comment
#28) On August 23, 2010 at 12:05 PM, binve (< 20) wrote:

zzlangerhans ,

LOL!. That reminds me of this scene:

[Narrator] Tobias arrived at his audition for "Frightened Inmate #2." The competition frightened Tobias, which he felt he could use in his performance. Unfortunately this made him more confident... which frightened him again.

Tobias: I'm ready.
..

Report this comment
#29) On August 23, 2010 at 12:38 PM, Valyooo (99.46) wrote:

Tobias is my favorite character of all time, I have a shirt of him.

When he rolls onto the stage to direct the play, funniest thing ever.

haha @ zzlangerhans, that's too funny

Report this comment
#30) On August 23, 2010 at 1:05 PM, binve (< 20) wrote:

ValyooRLholdings ,

>>When he rolls onto the stage to direct the play, funniest thing ever.

Tobias: "And you tell me you’ve got some P.E. teacher directing? That just makes me want to puke all over your head, sir! ... Give me a chance to tell the Bard’s tale, and I give you my word on humble knee, whence you shall not say it wasn’t e’er ... to be."

Teacher: "Jerry, you cool with this?"

Jerry: "Sure, let the little fruit do it."

Tobias: "Huzzah!!"
..

Report this comment
#31) On August 23, 2010 at 1:20 PM, outoffocus (23.20) wrote:

Who's Tobias? I ask because I know of a Tobias on youtube who is pretty funny.

Report this comment
#32) On August 23, 2010 at 1:24 PM, binve (< 20) wrote:

outoffocus ,

Tobias Fünke from Arrested Development (played by David Cross). One of the all time great pseudo-intellectual clueless characters.

.. kind of like me :).

Report this comment

Featured Broker Partners


Advertisement