SOME SENTIMENTS ABOUT THE MARKETS

I know it is very subjective, but I want to pick some examples how the mass out there think, feel about the market. I always try to understand the sentiment of the crowd and the investor’s society, but it is an impossible mission. The sentiment surveys tell us what the majority of investors guess, the market is bullish or bearish. That is pretty important to know the sentiment of the crowd in this case you won’t be the part of that losers game. Typically you have to do the opposite what mom and pops think about the market. Here below I just randomly collected some funny and short forum comments about their expectations. These comments are reacting on the bullish rally in the last two weeks:

• The Market needs to go down. Not based on fundamentals or technical (those cases can be made for both). No, it needs to go down because I majorly shorted the S&P today.
• The insane, criminal fraud continues.
• I have been out of the market since 2007. Watching it climb is fun. But I know what would kill this market. If I start investing again...
• just waiting for the pull back.

The other sentiment indicator is the AAII weekly report. It says the retail investors are overwhelmingly bullish. The historical mean in bullish sentiment is at 39% and recently we are at 52,7% level, which seems relatively high. So all in all the picture is not clear and obvious, there is quite a big noise. You see the market is so difficult to trade with because the humans are behind it and it is an extraordinary hard task to read their behaviour.

The BFM Assets Team.