Friday, September 23, 2005

Stock Market Sentiment Update

As you know I believe that there is way too much bearish sentiment about the stock market in the US to permit a substantial drop on prices.

Above this post you will see a chart of the Rydex Cash Flow ratio, courtesty of During the past four years, everytime the blue line dropped to 0.90 a substantial rally ensued. This is a reason for thinking the S&P will rally from here.

Along the same lines check out this column by Mark Hubert on Hulbert finds the sentiment of market timers currentyly very bearsh, especially on the Nasdaq.

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