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INVESTOR’S INTELLIGENCE: BULLS ARE BACK

11 February 2011 by Cullen Roche 8 Comments

Bullish sentiment jumped to 53.7% from 52.7% according to the most recent Investor’s Intelligence survey. This is the 12th straight week in which the percentage of bullish investment advisors has exceeded the percentage of bears by more than 30%.  The 10 week moving average in this differential is higher than it was at any point during 2007 when the market peaked.

We have seen similar persistent and excessive bullishness in the AAII survey.  This optimism appears to have done nothing more than fuel the bullish uptick in the market.  It is a sure sign that the Bernanke Put is well ingrained in every investor’s mind.  If this is truly the case then one has to wonder if equities can fall while investors believe the Fed is there to support them at every dip?  If not, then the trend line higher will remain intact into the Summer.   So far, it has undoubtedly worked as every meager dip is met with ferocious buying.  It’s become a can’t lose market.  As I’ve been jokingly saying, buy dips with leveraged funds on leverage.  And the fact that jokes like this are even being made is perhaps the most frightening thing currently occurring.  Mr. Bernanke has rehashed the Greenspan bubble mentality.  It is dangerous and irresponsible.  But it is the world in which we live.

Cullen Roche

Cullen Roche

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Comments
  • making sense

    looks like the market will not correct before QE II ends.

    02/11/2011 at 2:42 PM
  • Smith

    It is impossible for the market to go down. We have been in a cycle where there is good news and anything potentially negative is spun to be positive. Literally, straight up for the last 6 months. For example, did you know that we will soon have democracy in the Middle East? It has never happened but it will shortly. Oh and by the way there are no negative consequences to QEII or QEIII.

    Let it ride, yon cannot lose.

    02/11/2011 at 2:53 PM
  • Derfem

    Soros’s reflexivity and self-sustaining trends….

    02/11/2011 at 3:42 PM
  • Mercator

    If you are still buying, pick stocks that fit the “there’s always a bull market somewhere” category. We sailed past the 5-10 percent correction zone.

    02/11/2011 at 4:16 PM
  • George H

    …permanently high plateau…

    02/11/2011 at 10:29 PM
  • Edward

    The last push to new highs for NDX/QQQQ was on ho-hum internals. This is madness.

    02/12/2011 at 12:27 PM
  • 3421138532110

    “It is impossible for the market to go down”

    Gee….there is an original thought!

    02/14/2011 at 12:09 PM