Wall Street, Bear Back?

27 Aug

Posted by Red As News

51.6% of the operators, last week, was "bull" markets. Only il19% pessimistic. A signal that the rally might end. For experienced a situation similar to that of 'October 2007. The FDIC amends the rules on purchases of banks

The "too ... strops. The old adage could be used to analyze the mood hovering over that of Wall Street. Last week 's Investors Intelligence Advisors Sentiment index, which measures the sentiment of some 150 investment newsletters and as many advisers, has made an unambiguous signal: 51.6% of the experts is a positive trend over the future of the stock market. The highest level since December 2007. Those who have a sentiment "Bear" is only 19.8% of the operators, a value that at below 20%, which had not reached the most since October 2007. A month in which it is worth remembering, the S & P500 had reached its maximum and then glide for 17 consecutive months.

You might say: So, what does this information? The majority of investors still see the situation well. Everything is ok. In reality, things are not true. Just this week, as reported by Market Watch, Mary Ann Bartels, an analyst at Bank of America, stressed that care must be taken to break the threshold of 20% of forecast "Bear." It is a fact to be interpreted as a signal that the lists are reaching a maximum between. Approach, that of Ann Bartels, which should not too surprising: often, analysts use the measures of sentiment in the contrarian perspective. That is to say, when optimism rose too likely - think - that stock prices ritraccino, conversely, when pessimism is the stars, then it might be a chance to start over.

Usually, in fact, at times when players have in mass with a vision "Toro", things work well, a river of liquidity has already moved from the savings of investors to the stock exchanges. With the result, often, that the propellant starts to climb more scarce. "Such a strong positive sentiment - says John Gray, Investor Intelligence - wants to say that the consultants strongly recommended their clients to buy, reducing liquidity. And at this point, it becomes risky to take a position.

More. Other money managers remember how September is, for the S & P500, the worst months of the 'year. On average, from 1928 to today, the return was a negative rating of '1, 3 per cent. Certainly, one can argue that the means leaving things as they are: can occur as Trilussa remembered that the chicken is eaten by one ... but the media will always be half a chicken each. However, the data must reflect. Furthermore, in the third quarter of 2009 GDP U.S. could still bounce (Linn Anna Saunders, of Swabb, think more than 5%), and this should support the markets. But despite the rally can find also supports macro-economic, are the same optimistic to think that we "should take a breath."

That uncertainty is not lacking, however, demonstrated by the many concerns of investors in the banking sector rally. It is not much, or at least not in particular, to assess the fundamentals of institutions. In fact, it is a sentiment "enigmatic" compared to a sector where failure keeps happening and where the U.S. authorities are tightening the requirements compared all'identikit of the white knights. The Federal Deposit Insurance Corporation (FDIC), in fact, until now allowed the sale of the bank (failed) to other banking institutions subject to strict federal regulations, largely on lending and leverage. But the continued rise in bankruptcies (they could - by some estimates-up to 200 because of the crisis) has led the FDIC to vote for reform in the system: Buyers will also be the private equity firm with a capital ratio by only 10% compared to the demands of many experts as a percentage of 15%. A choice which, if not realized in the correct terms, may create many difficulties. It is clear that in this situation, the uncertainty could make the boss. And in a market where the psychological aspects are, at this moment, the essential change of sentiment would simply result in the price lists. This does not mean that we will return to risk the "armageddon" in mid-September 2007. Simply put, Wall Street could take a step back.