Kirk's Latest Investor Sentiment & Other Charts

Market Sentiment Update 

Read  Kirk Lindstrom's Investment Letter to see what these charts meant to me plus the full list of stocks and ETFs are in my "Explore Portfolio" with my price targets to both take profits or buy more shares, depending on market conditions, prices, sentiment and other factors.

Investors Intelligence Bulls / (Bulls+Bears) & S&P 500 Weekly  -  8/8/24

AAII Survey: Bulls & Bears

CPC Put Call Ratio 

Fear and Greed Index Fell to 20 this week and is currently at 22:

From https://www.cnn.com/markets/fear-and-greed

NAAIM EXPOSURE INDEX = 83.93: 

• The NAAIM Exposure Index represents the average exposure to US Equity markets reported by our members.
• https://naaim.org/programs/naaim-exposure-index/

2C-p = 7.8 is VERY Low:  

Invented by Tom Drake, the 2CS-p is the "5 day moving average of the product of the vix and p/c ratio."   The scale runs from 0 to 100% with 0% max bullishness and 100% max bearish reading for us contrarians.

To calculate 2C-p, Larbro explains: "Take each days p/c ratio and multiply it by that days vix. Take the sum of those results for that day and the previous 4 (5 total) and percentage rank them from 0% to 100% in terms of size against all the other data you have. The higher the numbers (5 day sum of p/c x vix), the higher the ranking. Then subtract that % ranking from 100% to "invert" the ranking so that lower 2c-p correspond to lows in the market and vice versa.

In my case they are ranked from today all the way back to Feb 10, 2003, the earliest I have data for. So in a nutshell if yesterday's 2c-p was 7.8% (which it is) that tells you that only 7.8% of the sum of the 5 day p/c x vix (aka the 2c-p) is lower than yesterdays value."

These charts are covered on page 6 of my newsletter with updates during the year for what the different types of sentiment charts mean to me. This is an easy place to give my subscribers updates of charts too numerous to add each month, especially after significant changes.                                                    

For more on investor sentiment and what it means to me, read my newsletter where 

• Page 6 is dedicated to a monthly update on sentiment.
• Page 12 summarizes sentiment and how it relates to five other "Market Factors" I follow to help set my asset allocation..

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Excerpt from my August 2024 Newsletter:

This is not an “exact science” so “all or nothing” market timing is foolish.

Market Timing Disclaimer: No sentiment indicator, or any indicator for that matter, is 100% reliable. I look at sentiment as head winds and tail winds. When sentiment is terrible, then it acts like a tail wind for your returns where you could see further declines, but long term, it is best to be buying when most others are selling. Likewise, if we see sentiment get too bullish, then I would consider lowering my portfolio asset allocation. It seldom pays to be buying stocks when EVERYONE is talking about stocks and how much money they are making at cocktail parties.

In addition, I am not market timing but for a small portion of my Explore Portfolio. I use market-timing indicators to tell me it is a good time to buy so I can add to positions when the market is down and thus help me overcome my fear to rebalance back to my target asset allocation. Likewise, when the market-timing indicators are saying to sell, they usually come when the markets are high where I want to be taking profits. The market timing indicators at market highs help me get over my greed and take profits.

NAAIM Sentiment National Association Active Investment Managers

NAAIM Sentiment Charts - National Association of Active Investment Managers 

Here is a chart for another sentiment index from the "National Association of Active Investment Managers" or NAAIM.

click for full size image

2010 YTD my "Explore Portfolio" is up 20.7% YTD
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Recent NAAIM Data

Date	NAAIM Number Mean/Average
12/22/2010	81.83
12/15/2010	74.74
12/8/2010	63.11
12/1/2010	62.47
11/24/2010	66.67
11/17/2010	66.59
11/10/2010	71.46
11/3/2010	69.47

According to the NAAIM website, NAAIM member firms who are active money managers are asked each week to provide a number which represents their overall equity exposure at the market close on a specific day of the week, currently Wednesdays. Responses can vary widely as indicated below. Responses are tallied and averaged to provide the average long (or short) position or all NAAIM managers, as a group.

Range of Responses

• 200% Leveraged Short
• 100% Fully Short
• 0% 100% Cash or Hedged to Market Neutral
• 100% Fully Invested
• 200% Leveraged Long.

About NAAIM

The National Association of Active Investment Managers or NAAIM was formed in 1989 as a non-profit association of registered investment advisors who provide active money management services to their clients, in order to produce favorable risk-adjusted returns as an alternative to more passive, buy and hold strategies. Originally called SAAFTI and comprised of a small group of successful, passionate firms, NAAIM has grown to include roughly 200 member firms nationwide, managing an estimated $14 billion. NAAIM's purpose is to promote the common interests of those investment advisors who provide active investment management services to clients.

NAAIM defines "active investment management services" as taking an active role in the ongoing process of investment selection and risk management with the objective of improving a portfolio's risk/reward relationship. The active management strategies used by our members are diverse, and utilize a broad range of securities including mutual funds, variable annuities, equity baskets, index-linked, exchange-traded securities, futures and other innovative products.

 Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 213%  vs. the S&P500 UP only 25% vs. NASDAQ  UP a only 22%   (All through 12/27/10) 
In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%

2010 YTD my "Explore Portfolio" is up 20.7% YTD
(the explore portfolio has 70% in equities and 30% in fixed income so the stocks are doing very, very well)

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