Saturday, March 22, 2008
A Panoply of Pessimism
This past week The New York Times ran 4 headlines on the current financial crisis, the first three of which you see above this post. I don't ever recall reading a string of NYT headlines like this on the financial markets in such a short period of time.
Below the NYT headlines you will see an image of the current cover of the Economist Magazine. It shows a crack in the facade of Wall Street, perhaps a prelude to disintegration.
The next two images illustrate the deepening pessimism among the investing public. The first shows the AAII weekly sentiment numbers which have been showing the most bearish sentiment seen in almost 10 years. The same is true of the percentage of bearish investment advisors surveyed by Investors Intelligence.
Finally at the top of this post you see the put-call ratio for equity puts and calls (excluding index puts and calls). Both the daily reading and the 10 day moving average have hit 10 year record extremes of bearish sentiment this past week.
All in all this is an unprecedented display of bearish sentiment, especially when coupled with the magazine cover displays seen in late January and February. I commented on these here, here, here, here, here, and here.
I think this market is going much higher, probably to well above the October 2007 top. For an opinion that agrees with mine see this article in the latest issue of Barron's.