Fascinating Finding in Sentiment Polls: Bull Market Is Here To Stay

Discussion in 'Trading' started by shortie, Apr 18, 2009.

SPY In A Week

  1. +5%

    15 vote(s)
    18.5%
  2. +2%

    9 vote(s)
    11.1%
  3. flat

    18 vote(s)
    22.2%
  4. -2%

    17 vote(s)
    21.0%
  5. -5%

    22 vote(s)
    27.2%
  1. My hands have been itching to swing some shorts. Naturally, I could not resist and have opened short positions last week (under water now). These are meant to be 1-5 day swing positions.

    As typical, looks like I was too early based on the negative sentiment that I see in the polls from realmoney.com. I found polls from last 3 weeks. Looks like they are initiated on a weekend and, i am guessing, most of the voting is done on that weekend.

    One interesting observation is that the sentiment is extremely volatile. Another one is that the bearish sentiment is very strong going into the next week. These are dumb money voting, so they usually get it all wrong.

    dates 03/29 04/09 04/17

    Bullish 15.4% 44.0% 30.2%
    Bearish 76.7% 40.8% 58.4%
    Neutral 7.9% 15.2% 11.4%

    Total Votes 22150 8143 5815

    the last poll: http://www.thestreet.com/story/10487768/1/bull-or-bear-vote-in-our-poll.html?cm_ven=GOOGLEFI
     
  2. Their bearish because they all lost their jobs, not because they have a "view" or "take" on the Market.
     
  3. they may have lost their job and feel like crap. i agree with that.

    but what is important is that they genuine market participants (have positions, or are considering to open positions). otherwise they would not have been read RealMoney and voted in the poll.
     
  4. IMO sentiment is sceptical of this rally. I am not holding longs because my long-term view is very bearish, but I am not shorting because the market is undeniably acting very strong and sentiment is still negative. I tried one short around 795 and covered for a small loss, nothing I seen so far makes me wanna try again at the moment. If a bear like me doesn't wanna go short into a huge rally, then it's probably a bad idea.

    I don't think it's likely to see a big decline until shorts capitulate and people on the sidelines pile in out of fear of missing the move. IMO that probably won't happen until somewhere like 940-1000 on the S&P. I would wanna see a couple of big up days and lots of media bullishness, then I think we'll be setup for a fall back.
     
  5. No disrespect, but by definition and considering your present positions, aren't you the "dumb money"? You really are dumb money if you enter positions based on realmoney.com sentiment polls.

    I haven't been to realmoney.com in years so I could be wrong about their information. Isn't that site owned by Jim Cramer? If so, then I think I'll continue to keep my distance.
     
  6. Did you not get the memo?

    Smart money is now fading itself.

    :p
     

  7. i admit that i am not very bright. but you misunderstood that i took my position based on realmoney poll. i entered shorts based on my own reasonings. i saw the poll only this friday and i dug up the older ones. having seen the polls, i want to bail out of my shorts ASAP.

    i don't care who owns realmoney. i don't read it, but the polls have value IMHO.
     
  8. LOL!

    More seriously now: does it explain the recent "everyday" open gaps?
     
  9. Possibly. It seems too easy though - just sitting around waiting for capitulations. Like the generals fighting the last war, traders stick to the strategies that worked before but that might be out of date. IMO if 20 million smart guys are waiting for the obvious entry point that point won't happen.
     
  10. piezoe

    piezoe

    Shortie, If cutten is right and shorts will likely be taken out first before the real downward correction can begin in earnest, then that certainly would constitute a high probability entry for new shorts.

    We are at resistance and Friday's move was up to make a new high in the current up-trend on very low volume in ES. These would normally be classic signs of an impending breakdown, so i can see why so many are anxious to get short. But Friday was also Options expiration, so anything goes, and i'm thinking i better just watch and see what happens on Monday and Tuesday next week. I wouldn't be surprised to see the market move down off of resistance early next week and perhaps dip a little below the trend-line which would take it below 850. That surely would bring in more shorts with stops clustered above 875, and taking them out would then provide some juice needed to move on up to the 940 area that Cutten is talking about.

    Another thing that makes me feel that we can go through the 875 resistance (likely after an initial drop) are those analyst recs from GS and MS of a couple weeks ago that we should all start getting short because financials are overbought. Yah, right!:)

    P.S. I enterd one short position Friday because of the classic signs i referred to. But i'll be jumping out quick if we don't get that initial drop from resistance i expect. I'll likely take quick profit also, if afforded the chance, because i lean toward cutten's scenario that has the shorts being taken out first and a thrust still higher before the corrective down move can get started for real.
     
    #10     Apr 19, 2009