09/23/2010

(This is an excerpt from Friday's blog for Decision Point subscribers.)

Wall Street Sentiment is one of many sentiment indicators we chart.  Wall Street Sentiment Survey data are provided courtesy of Mark Young of Equity Guardian Group. Data are complied from the results of a weekly survey of a group of experienced traders and technically oriented market analysts with a diverse set of analytical disciplines from Mark's message board at traders-Talk.com. Polling is conducted after the market close on Friday, and the results are normally published late Saturday. You can find more information on Mark Young's sentiment work at WallStreetSentiment.com.

What makes this sentiment survey unique is that the poll is taken after the close on Friday, and those polled are asked only to predict where the market will close as of the end of the following week -- up, down, or neutral (no opinion). In other words, everyone is on the same page, and only short-term projections are solicited.

Something I noticed when posting last weeks poll results was that bearish readings of greater than 65% often preceded price tops by a week or two. Reliability seems to be enhanced if a high percentage of bears occurs during an advance. I think this is unusual because, when sentiment indicators show strong bearish readings, a price advance usually follows.

The most recent reading of 75% bears has occurred during a modest advance, so it is probably a good idea to curb bullish enthusiasm.

Below is a longer-term chart to give you a better idea of the range of these sentiment readings.

 

 

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Technical analysis is a windsock, not a crystal ball.  

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Decision Point's Timer Digest Rankings

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BIO: Carl Swenlin is a self-taught technical analyst, who has been involved in market analysis since 1981. A pioneer in the creation of online technical resources, he is president and founder of DecisionPoint.com, a premier technical analysis website specializing in stock market indicators, charting, and focused research reports. Mr. Swenlin is a Member of the Market Technicians Association. 

 

 

 

 

 

 

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Copyright 2010 Decision Point. Nothing herein should be construed as an offer or solicitation to buy or sell any security. Past performance does not indicate future results.