Short-term measures of investor market sentiment are flashing warning signs. The Ned Davis Research (NDR) gauge has moved up to a sell signal at 78, a very high number for this short-term measure. Meanwhile, at 62, CNN’s Fear/Greed gauge has moved higher into the greed zone, also warning investors to be cautious. from a contrarian point of view.
Long-term sentiment gauges, on the other hand, have become more bullish. The Investor’s intelligence bulls/bears sentiment number has
jumped to 52% bullish, while the bears have dropped to 19%. Meanwhile, the NDR intermediate crowd sentiment number is basically unchanged at 64. While this is high, it does not enter intermediate sell territory until it reaches 70.
“Be fearful when others are greedy and greedy when others are fearful.”