Intermediate term market sentiment indicator is flashing warning signs to be cautious. The Investors-Intelligence polling of more than 150 market newsletter writers shows they are very optimistic. That is a warning sign from a contrarian point of view since they historically are wrong. Some 62% of the newsletter writers were bullish and only 18% were bearish. Meanwhile, the Ned Davis Research (NDR) Crowd Market Sentiment was at 68, very close to 70, which triggers a sell signal.
Meanwhile, short-term market sentiment remains neutral, which doesn’t give us guidance about market direction. The CNN Fear & Index is at 46 and the NDR short term market sentiment composite is at a neutral 58.