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Another Look At Sentiment


Guest ike

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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.

 

bulls.jpg

nazbull.jpg

........

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 The list was originally made up by 38 guests, and it pretty much remained intact until November of 2000.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.

 

Marketviews

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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!"

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Guest BEARDRECH

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---

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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

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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!

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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.

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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.

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