Hate 'em at the lows, Love 'em at the highs

Discussion in 'Trading' started by ByLoSellHi, Oct 20, 2009.

  1. Bullishness at Contrarian Extreme
    October 18, 2009


    As a long-time student of the markets, I've learned that traditional "fundamentals" don't always tell the full story. For me, at least, it's also important -- essential, actually -- to take technical, sentiment, and macro factors into account when trying to figure out which way prices are headed.

    That doesn't mean I always get it right. In fact, I've had more than my fair share of bad calls, especially when it comes to the shorter-term outlook. Regardless, I've found that my odds tend to improve when the aforementioned elements are all pointing in the same direction.

    With that in mind, the following chart (courtesy of Elliott Wave International) and remarks by Tim Knight, from a post at his Slope of Hope blog (another long-time favorite of mine), entitled "Some Insights from EW," suggest that bullishness has reached a contrarian extreme:

    The [following] chart shows the perverse relationship sentiment has with stocks. In early March, when stocks were a ridiculous bargain and multi-thousand percentage gains were just waiting to be plucked, the sentiment reading was an unheard-of 2% bulls.

    Now, however, with stocks at (in my opinion) insanely-overpriced levels, and with all those multi-thousand percent gains already part of financial history, people are ga-ga about stocks.

  2. S2007S


    Exactly, funny how people are chasing stocks after a 60%+ rally yet when they were off 50-99% off highs no one wanted them.
  3. Ummmm both of you were bearish at the lows...

    Once you two become bullish I'll plow my entire net worth into shorts.
  4. Darshan


    POWNED!!!!!! :D :D :D
  5. S2007S


    Getting EXTREMELY bullish on this 27 point pullback....

  6. The whole thousand dollars, flipper?

  7. Everytime BLSH starts a bearish thread I've been buying 10 ES.

    I'm up like 200k by now, thanks BLSH. Tell me when your getting long so I can sell it.
  8. There's a dip for you to buy today.


    Keep buying those dips, and go all out on margin, while you're at it.
  9. This site is for traders, not doom and gloom paper pussies. BLSH.
    #10     Oct 20, 2009