Optimism has already returned to the stock market

by spontaneousdisorder

I thought I’d briefly point out a couple of sentiment indicators. The markets got oversold about a month ago but a sharp rally has already worked off that condition.

The daily sentiment index has already reached 73% in the S&P and in the investors intelligence survey bears are reduced to just 21.3% and a bull bear ratio of 2.13! (the ratio recently dipped below 1.0 very briefly!)

This is hardly the persistent bearishness of a decent bottom. I’d expect at least a partial pullback soon. Maybe it will take longer for the next big leg down to occur though I’m not sure.