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Something's Happened To Investor Sentiment Since The Financial Crisis
Submitted by Callum Thomas via AMP Capital,
The US bull market is the most ‘neutral’ bull market on record. Past examples say this could be bullish, but the absence of bearishness is a complicating factor.
One trend I previously highlighted is the increasing neutrality of investors in the investor sentiment surveys (with a focus on the Investors Intelligence [II] and the American Association of Individual Investors [AAII] in this analysis). As the market moves higher, investors have become more and more neutral.
My suspicion is that there is an element of psychological scarring from the GFC as investors suspect the next GFC could come at any moment – a heightened sensitivity or aversion to bubbles. So investors resist being bullish, and in the context of a rising market where things are gradually improving they don’t want to be bearish either - so neutral is the place to be.
So what? What happened in the past when investors were this neutral? Well, the problem is they have never been this neutral, so it’s hard to answer that question. We saw a rise in neutrality after the initial recovery from the GFC which was followed by a big bull market. We also saw a rise in neutrality in the middle stages of the dot-com bull market. And again in early 1990s before the late 90s bull market took-off. So you could make a case that it is a good thing. The complicating factor is the bears are also around the lowest point ever.
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Absence of bears? Nonsense. They can all be found, skinned, and on the floors of the Fed's offices.
Or with the bond vigilantes at the bottom of the ocean wearing cement shoes.
Putin fan boy ;)
That's because the word is out: All levers have been pushed up into the "run until failure" position. There is no point being bearish any more. When things go south next time NOBODY will make it out whole-skin. Not the short-sellers. Not the HFT boys. Not granny with all her money in an FDIC-insured savings account. Everyone will burn. (Yes, gold bugs, your barbarous relics will be confiscated again, just like in the 1930s- don't think you're getting out of this either, you tricky bastards!)
Given that inevitability, you make hay while the sun is still shining because when it gets dark out, everyone gets eaten. Even the guys who bet on the coming darkness.
>>>> (Yes, gold bugs, your barbarous relics will be confiscated again, just like in the 1930s- don't think you're getting out of this either, you tricky bastards!)
maybe not.
less that 1% of the folks own it & I doubt they've left a treasure map handy just laying about.
"investor"... "markets"... LMFAO!!!
They are using psycho-babble now, so we are definitely fucked.....
Euphemisms for 'sociopathic, narcissistic gambler' and 'rigged casino for the tribe' .
If you do not know it is the Fed manipulating markets higher through its unofficial arm, Citadel, and numerous Kevin Henrys, you may want to cut back on your opiates and liquor.
Forward
Must be someone important not quite out.it sure isn't about the bagholders they
are keeping it levitated for.
JustObserving- I am aware of what you say, but was thinking of actually increasing my opiates and booze.
Chart looks scary enough to worry about how big this crash is going to be..It happens when the market is manipulated, but at some point soon, we will see the consequences.
speaking for myself I would say this is b/c since 08 the fed has effectively suspended the laws of physics. yes, the balls continued to rise but where would they be if gravity were properly functioning, when (if ever) will it be turned back on, what will the corrective trajectory look like, how long will it take (the ball to get back where it should be). people are neutral b/c they know that while asset prices (particularly equity) have risen a non-trivial % of this is manipulation & until (/again, if ever) it's phased out who the hell knows what anything actually is worth? (the whole destruciton of price discovery argument).
investors, lulz
Amazing to see this dogshit "analysis" featured here at ZH.
Good for Monday Humor I guess?
I don't know who they survey, but every one i know thinks something bad is coming, sooner than later
That's becasue everybody you know hangs out here at the Hedge.;->
+100 funnny shit thee alright. And no laughing at the guy above. Its true. Most people I talk to are uncertain about a lot of stuff in their own worlds where ZH is not a factor.
September, according to webbots ... <sigh>, but they are even more perma-bearish than this site. There was a mention of a ~40 year depression. No WWIII though, so it's all good ....
What happens? Slowly but surely moar "analysts" come to grip with the fact that we no longer have markets, we have policy tools.
Those responsible might be offended. Tools have feelings too.
I'm feeling my tool right now.
LOL -- TMI.
"market" = "Federal" "Reserve" bond buying
Bull or Bear, makes no difference. This "market" is owned and managed by Banksters Inc.
It's a fucking fantasy!
The absence of bearishness....
That's what it's all about. No Christianity without hell. No bears with QE. Diminishing returns is a bitch, bitchez.
They realized the whole system is corrupted.
Makes sense to me. How could one either be bearish or bullish when the only tthing that matters is how much of what will which central bank buy next? The only people that know this for sure are the central banks themselves and the people who give them their orders (Goldman Sachs). Everyone else is just guessing and it could go either way, the banks may print this market higher for the next thousand years or they could let the whole thing collapse tomorrow. We wont know till after it happens.
"We saw a rise in neutrality after the initial recovery from the GFC which was followed by a big bull market. We also saw a rise in neutrality in the middle stages of the dot-com bull market. "
Are you saying we are just in the middle of this bubble? I think we are pretty frothy right now...
Some of the rather bizarre market action recently has me wondering if we are in the middle of a "bear market rally" where many of the stocks going up are doing so over the bones of shorts forced to cover. and if so how violently it might end. Several stocks on an uptrend appear fundamentally unstable. We have witnessed massive moves in several speculative stocks like Tesla and Netflix that are hard to defend by any other reasoning than shorts being squeezed out of the market.
The higher the market goes the more vulnerable it becomes to a major collapse and sudden downward price move. A lack of short positions will bode poorly for the market if it falls rapidly because in such a situation as shorts take profit and buy back their positions they act as a floor under the market giving it support. The article below delves into how this could be a problem going forward.
http://brucewilds.blogspot.com/2015/07/is-this-bear-market-rally.html