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Another Look At Sentiment


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#1 Guest_ike_*

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Posted 08 December 2002 - 10:10 PM

I make this chart available to the public once every 4-6 months. So, here it is, and the history behind, for whatever is worth, if it is worth anything to anyone!
The bar before the last one was for 10-10-02, the last bar is for 11-29-02, in case you can't read it.

Posted Image
Posted Image
........
From 1969 until November of 2000, there was a TV channel here in Southern California (KWHY-22) that was the first one -in 1969- to provide all day stock market and business coverage, in fact it was the first one to use a live ticker on the air. The channel was bought out by Telemundo in November of 2000, and all programming was converted to Spanish, thus eliminating the stock market coverage. Anyway, during 30 years of coverage, station had established a large list of regular guests from all over the country. Our firm, in addition to managing assets for offshore investors- is a research shop. We do all kinds of technical and econometric research, for our own use, as well as, for the use of other institutions. In fact our firm provided around the clock technical analysis for the channel in its last days. In late 1994 we were commissioned to develop a sentiment indicator based upon the market views of the guests who appeared regularly on KWHY. We started out without any pre-conceived ideas, we decided to just collect the data, and let the data tell us what kind of an indicator we could designed (confirming, or, contrarian) For the next three years 1995, 1996 and 1997, we listened, examined and archived, everything that was said by every regular guest. By 1998 we were able to come up with two lists of guests. One was a list with guests who between 1995 to 1997 they were consistently wrong in their market prognostications, (meaning they were wrong over 60% of the time) the other, was a list of guests who in the same period, were consistently right in their market prognostications (meaning they were correct over 60% in their market prognostications) We decided to use the second one, as a confirming indicator, and thus we proceeded to test the indicator over the next two years. The list included some very well known names, such as the late Bill Meehan, Ralph Block, Gerald Appel, Sherman McClellan, Art Hogan, Larry McMillan, Bernie Schaffer, Dick Russell, and Dick Arms among others. The list was originally made up by 38 guests, and it pretty much remained intact until November of 2000. When the program went of the air, we could no longer track the views of all these people. However, I personally knew about two thirds of them, so, we revived the indicator in January of 2001, from input from those who we knew, plus a few others who we are able to track thru other means (internet, newsletters) The current list has input from 49 individuals. However, here is the fascinating part. In late 1999 and early 2000, we observed something that got our attention: until then, the views expressed by all these people were pretty much in tandem, however, between late 1999 and early 2000, those who were older got increasingly bearish, while the younger ones got increasingly bullish! The difference was so noticeable, that we started to track the indicator by age group. We divided them in three groups, 30-45( blue bars) 45-60 (red bars) and over 60 (yellow bars) The two charts above, show NASDAQ at turning points over the past three years, and the sentiment of each group at that point in time. Remarkably, as NASDAQ plunged the older group got more bearish, while the younger group remained bullish, and the group in the middle stayed bullish to neutral.
We must caution against making too much of this for the following reasons:

a) Both the original list, and the current list, are small (38 and 49 individuals respectively) thus the sample is probably too small to have statistical significance.
B) We never actually asked anybody how old they were! We took a guess, so, there may be some inaccuracies, due to the fact that some could belong to another age group. Given the small size of the sample, it can make difference in the final calculations.

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#2 The End

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Posted 08 December 2002 - 11:56 PM

It tells me alot that you did this to begin with. :wink2:

Tanks for sharing your great work hear.
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#3 Guest_ike_*

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Posted 09 December 2002 - 12:55 AM

For "the end"
Thank you for your kind remarks, always.

You know "The future ain't what it used to be..." legions of brainwashed morons are praying to the Lord, that it will be otherwise, but we know better, "...you can't petition the Lord with prayer" why? well, it's too late "the Man is at the door... this is the best part of the trip, the part I really like... the Soft Parade has now begun!"

#4 Guest_BEARDRECH_*

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Posted 09 December 2002 - 01:29 AM

ike-thanks-but stop worrying about the limited nature of your statistical universe- you've filtered out all the untermenschliche innumerate noisebags and gathered those that are fleet of mind--i could walk you through my extended neighborhood asking market opinions of everyone including allof the age cohorts and all you'd get would be a caravan comprised of truckloads full of thoughtless stink--(dont get me wrong i love them all but not for your measured reasons) --getting the best of the best collective opininion is worth its weight in palladium-- keep up the good work--it may wind up saving my ass---

#5 The End

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Posted 09 December 2002 - 05:58 PM

Ike baby,
You are a doors fan. :grin: :grin:

The soft parade is one of my favorite songs. And here it is:


When I was back there in seminary school
There was a person there
Who put forth the proposition
That you can petition the Lord with prayer
Petition the lord with prayer
Petition the lord with prayer
You cannot petition the lord with prayer!

Can you give me sanctuary
I must find a place to hide
A place for me to hide

Can you find me soft asylum
I can't make it anymore
The Man is at the door

Peppermint, miniskirts, chocolate candy
Champion sox and a girl named Sandy
There's only four ways to get unraveled
One is to sleep and the other is travel, da da
One is a bandit up in the hills
One is to love your neighbor 'till
His wife gets home

Catacombs
Nursery poems
Winter women
Growing stones
Carrying babies
To the river

Streets and shoes
Avenues
Leather riders
Selling news
The monk bought lunch

Ha ha, he bought a little
Yes, he did
Woo!
This is the best part of the trip
This is the trip, the best part
I really like
What'd he say?
Yeah!
Yeah, right!
Pretty good, huh
Huh!
Yeah, I'm proud to be a part of this number

Successful hills are here to stay
Everything must be this way
Gentle streets where people play
Welcome to the Soft Parade

All our lives we sweat and save
Building for a shallow grave
Must be something else we say
Somehow to defend this place
Everything must be this way
Everything must be this way, yeah

The Soft Parade has now begun
Listen to the engines hum
People out to have some fun
A cobra on my left
Leopard on my right, yeah

The deer woman in a silk dress
Girls with beads around their necks
Kiss the hunter of the green vest
Who has wrestled before
With lions in the night

Out of sight!
The lights are getting brighter
The radio is moaning
Calling to the dogs
There are still a few animals
Left out in the yard
But it's getting harder
To describe sailors
To the underfed

Tropic corridor
Tropic treasure
What got us this far
To this mild equator?

We need someone or something new
Something else to get us through, yeah, c'mon

Callin' on the dogs
Callin' on the dogs
Oh, it's gettin' harder
Callin' on the dogs
Callin' in the dogs
Callin' all the dogs
Callin' on the gods

You gotta meet me
Too late, baby
Slay a few animals
At the crossroads
Too late
All in the yard
But it's gettin' harder
By the crossroads
You gotta meet me
Oh, we're goin', we're goin great
At the edge of town
Tropic corridor
Tropic treasure
Havin' a good time
Got to come along
What got us this far
To this mild equator?
Outskirts of the city
You and I
We need someone new
Somethin' new
Somethin' else to get us through
Better bring your gun
Better bring your gun
Tropic corridor
Tropic treasure
We're gonna ride and have some fun

When all else fails
We can whip the horse's eyes
And make them sleep
And cry
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#6 SusanJBear

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Posted 10 December 2002 - 11:57 AM

Hi Ike,

Gee, thanks for reminding of that KWHY newscast!

I live in Southern California and some years ago regularly watched that terrific business newscast you spoke of - where else do you get a guy on the news at 6:30 AM talking about support and resistance lines, oscillators, relative strength, and so forth - using a pointer on charts? That show, believe it or not, was my very first introduction to TA. Has any other station picked up that anchor team? It is a pity that newscast has vanished.

When I think of that show, it makes me realize how watered down and mushy and worthless the real mainstream financial news is nowadays - basically they just tell people the easy stuff they want to hear, not stuff that might make them really think about how the markets operate.

Your "guru indicators" story is also fascinating. I expect it would be very difficult to do an unbiased study like that - if there is a process for selecting guests for the show would that mean that they've already passed through some "filter"? Though I would have expected that the KWHY show to do a better job of guest selection, though, than say, Crapvision.

If there were equal weighting in the financial news between bullish and bearish opinions we would be seeing the likes of Richard Russell, David Tice, Bob Prechter, and other bears with the same frequency we see or hear the bulls, and we are nowhere close. In fact, in a recent Elliott Wave Theorist, Prechter described his NY media tour in October and how he was pointed out as "the bear" and how his interviewers would say, "I know another bear!" as if the bears were some sort of alien species.

I like your stories. Thanks!

#7 machinehead

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Posted 10 December 2002 - 12:40 PM

The End, thanks for reminding us that the Soft Parade has begun.

I changed my signature line in your honor.
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#8 FauxCaster

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Posted 10 December 2002 - 04:59 PM

Ike, great chart. Sounds like your scientific instinct is razor-sharp. No wonder you're in the top rung. If you've ever looked at hardware benchmark sites that always include a note like 'longer bars are faster', or some quick note to aid those who don't want to think about the details. If you're making the chart available to a large audience, you could put in 'taller bars are more bullish' or something like that in the white space beside the chart.
"WE ARE BEING KEPT ALIVE by the Entropic movement of Dark Matter(Sino-Nippo-dollar purchasing of $UST)---as soon as there is a ringing sound,a sign of an clogged artriosclerotic wormhole on the emergency fiat-meter it will end--dynamic equilibrium,will have been achieved;better known as death" -- beardrech (Mar 15 2006, 01:17 AM)

"There's a good chance he was drunk or drugged. Only an idiot would jump into the bear cage." -- Belgrade Zoo Director Vuk Bojovic (August 20, 2007).

It's like you're dreamin' about Gorgonzola cheese when it's clearly Brie time, baby. -- Hitchhiker (S.A.M. 1998)

Mar 28 2003: July 2003 is the time I have identified as the low of the bear move...then the first leg of the bear is over ...many will be caught by surprise to see the market near it's all time high again within 3-4 years [2007] ..."depression" similar to 1932 doesn't come until 2010. -- blackbelt (Mar 28 2003, 10:05 PM)

#9 ThorAss

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Posted 10 December 2002 - 11:42 PM

Clowns to the left of me, jokers to the right.
Here I am, stuck in the middle with you.
I have many opinions; but I strive not to act on them.

#10 Pretzel Logic

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Posted 11 December 2002 - 02:30 AM

Here's another for ya'... I made this my signature (until I get sick of it, anyway):
In honor of the times, back to the 2008 signature:

"When Black Friday comes, I'll stand down by the door,
And catch the grey men when they dive from the fourteenth floor,
When Black Friday comes, I'll collect everything I'm owed,
And before my friends find out I'll be on the road,
When Black Friday falls
you know it's got to be...
Don't let it fall on me." - Steely Dan, Black Friday

#11 machinehead

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Posted 11 December 2002 - 04:59 PM

Passing by the CBNC studio in Fort Lee, N.J. this afternoon, MH espied a pink envelope on the ground. It was addressed to "Maria B., the Feed Angel." Inside on Goldman Sucks stationery was a handwritten poem. It is adapted from lyrics by the Red Hot Chili Peppers, a great L.A. band which arguably has inherited the mantle of The Doors.


SUCK YOUR KISS

Shoulda been coulda been
Woulda been dead
If I didn't get the message
Goin' to my head
I am what I am
Most f**kin' borkers don't give a damn
Aw baby think you can
Feed my peeps, I'll be your man

Someone full of fun
Do me till I'm well done
Little Bo Peep
Repo'd from my stun gun
Beware take care
Most f**kin' bonkers have a cold-ass stare
Aw baby please be there
Blow your kiss, cut me my share

SPIN ME, you can't hurt me
Blow your kiss
Feed me, please pervert me
Stick with this
Is she talking BULLISH?
! ! !
Give to me sweet sacred bliss
My peeps were made to SUCK YOUR KISS

Look at me can't you see
All I really wanna be
Is free from a bear that hurts me
I need relief
Do you want me girl
To be your thief
Aw baby just for you
I'll bork anything you want me to

P-U-M-P-I-N-G
Chicka chicka dee
Do me like a banshee
Lowbrow is how
Swimmin' in the sound
Of bow wow wow
Aw baby do me now
Do me here I do allow

SPIN ME, you can't hurt me
Blow your kiss
Feed me, please pervert me
Stick with this
Is she talking BULLISH?
! ! !
Give to me sweet sacred bliss
My peeps were made to SUCK YOUR KISS


adapted from Red Hot Chili Peppers, "Suck My Kiss," on Blood Sugar Sex Magik, 1991, and Off the Map live convert DVD, 2002.
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#12 getsoutalive

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Posted 11 December 2002 - 08:08 PM

Ike,

Thanks for sharing a most inciteful study. This place is too much.

Had to join the sig party.





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