THE SINGLE BEST INDICATOR OF BULLISH SENTIMENT
The sentiment geeks are always switching between different indicators of bullish and bearish sentiment in an effort to gauge whether the market is close to a top or a bottom. If it's not the AAII survey, it's Market Vane or Investor's Intelligence. Maybe it's the COT numbers that tickle the fancy of some traders? The VIX is a fan favorite, as well. The list goes on and on.
I have traded with and attempted to profit from every single one of these indicators over nearly two decades of speculation in the financial markets. The single best indicator of bullish sentiment time and time again has been individual stocks themselves. I described how to use individual stocks to gauge market sentiment in my "Phase 4" article published in February.
With all the squabbling amongst the bulls and the bears about whether we are about to make new highs in the market averages or plunge to multi-month lows over the next few weeks, I thought now would be a good time to measure what "Phase 4 investors" are up to. Let's take a look at 3 companies and 1 ETF:
(click on the charts below to enlarge)
JDSU
FNSR
CIEN
PXQ (networking ETF)
CIEN and PXQ are giving us early signals that speculative money is coming back into the market. FNSR and JDSU moving up substantially over then next few days will be the final bell sounding on this short-term bull cycle, within what I believe will be a sideways trading range for the next few months.
You want sentiment indicators? I just gave you four of the best. Keep your eye on them.
