Intermediate-Term Sentiment Indicators Flash Warning Signs for Stocks

Measurement of the level of  investor optimism for the short term moved slightly higher this week compared with the previous week. The CNN Fear & Greed Index moved to 61 while the Ned Davis Research (NDR) Short-Term Sentiment Poll was at 60. From a contrarian point of view that indicates stock market investors should be cautious but not overly alarmed for the near term.

On the other hand,  sentiment indicators on market direction over the intermediate term are flashing warning signs. The NDR crowd sentiment is at 67, which is quite high. The Investors Intelligence Bulls/Bears is at a very optimistic 57% bulls and 18% bears.  This puts the bulls/bears ratio at 40, which is in the danger zone.

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