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There are more bears than bulls in this week's poll.
Blogger Sentiment Poll Participants: 24/7 Wall St (-) Ahead of the Ticker (-) Carl Futia (+) Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (+) In the Money Learning Curve (-) Maoxian Millionaire Now (-) Peridot Capitalist (N) Quant Investor (N) Smart Money Tracker (-) TheStockAdvisors.com Traders-Talk (-) Wall Street Folly
This week's poll recorded the highest bearish reading since September-08.
Blogger Sentiment Poll Participants: 24/7 Wall St (-) Ahead of the Ticker (-) Carl Futia (+) Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (-) In the Money Knight Trader (N) Learning Curve (-) Maoxian Millionaire Now (-) Peridot Capitalist (-) Quant Investor (N) Smart Money Tracker (-) TheStockAdvisors.com Traders-Talk (-)
On a relative strength basis the tech sector broke out to new highs today and is in a good position to continue its leadership roll. Over the last year technology stocks have been clear leaders among S&P 500 names, Google, Apple and IBM for example all bottomed in 2008 and did not participate in the market's January decline.
By breaking the sector down into its members, the stocks that led this last push higher (beginning with the 10/19 high) are shown below. Microsoft alone accounted for 54.6% of the sectors's 2.77% gain.
The Wall Street Journal featured our research in today's paper, highlighting the shift from small cap leadership into large cap. Click here for a link to the full article. Below are more details on the analysis.
The chart below shows the Russell 3000 performance across ten groups. Group 1 contains the smallest stocks by market capitalization, while group 10 contains the largest stocks. As shown, the smallest stocks gained an average of 359.55% between 3/9/09 and 8/31/09, more than double the next-best group. The largest stocks were the worst performers during that period, gaining an average of 58.73%
If we now look at the period between 8/31/09 and 11/10/09 exactly the opposite trend has occurred. The largest stocks in the Russell 3000 performed the best, gaining an average of 7.48%, while the smallest stocks performed the worst, losing an average of 1.50%.
While we can't necessarily call this a "shift to quality" (since we're not really sure how you define "quality"), it does highlight risk aversion in the market as blue chips outperform more volatile small caps.
The same trend holds true for index returns. Between 3/9 and 8/31 the Russell 2000 was the best performer, up 66.66% vs a 45.05% gain for the DJIA. Between 8/31 and 11/10 the DJIA performed best, gaining 8.67% compared to the Russell 2000's gain of 3.77%.
US market volume has been expanding since enormously since 2005. There has been a lot of scuttlebutt this year regarding a lack of volume, usually referring to NYSE trading because of its availability. The chart below shows NYSE floor volume as reported by the exchange in red (this is the same number you would find on WSJ.com or any other data provider). As shown, NYSE volume is largely unchanged since 2000 because there are actually four key stock exchanges in the US: the New York Stock Exchange, the NASDAQ, the NYSE Arca, and the FINRA ADF. Birinyi Associates has been a long-time commentator on structural changes occurring in the market; the pinnacle of that work being "the Next Crash."
By digging deeper and looking at total volume for NYSE issues we find that there is significantly more trading than many people realize. To calculate total volume, shown below in green, we added shares traded on all US exchanges for each NYSE listed stock, and then added all of the stocks' volumes for a given day. Using this methodology we find that on 11/6/09 total volume for NYSE issues was actually 4.89 billion shares versus NYSE volume of 1.29 billion shares.
We realize that this shift in volume is becoming more widely publicized, and that this post is not groundbreaking, but we also note that any analysis using volume to confirm a market's move should be scrutinized.
Blogger Sentiment Poll Participants: 24/7 Wall St (N) Carl Futia (+) Crowder Blog (-) Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (-) In the Money Knight Trader (+) Learning Curve (-) Maoxian Millionaire Now (N) Navivest Peridot Capitalist (-) Quant Investor (N) Smart Money Tracker (+) Traders-Talk (N) Wall Street Folly Wishing Wealth
As reported this morning, the unemployment rate in the US rose above 10% for the first time since 1982. As shown below, this is by far the fastest rise since continuous data begin in 1948. It is interesting to note that from 9/30/1982, when the rate first rose above 10%, to 7/29/1983, when unemployment first fell below 10%, the S&P 500 gained 34.99%.
From 1962 through the third quarter of 2009 the S&P 500
had an average annual return of 8.71%; the weighted average
Investing in the biggest, best, and fanciest funds did not pay off.
(The green line represents mutual fund performance, the blue line represents total sales - inflows minus outflows.)
Bloggers are mostly neutral to start a new month.
Blogger Sentiment Poll Participants: 24/7 Wall St (-) Carl Futia (+) Crossing Wall Street Dash of Insight (N) Elliot Wave Lives On (-) In the Money Knight Trader (+) Learning Curve (-) Maoxian Millionaire Now (N) Peridot Capitalist (-) Quant Investor (N) StockAdvisors.com Wall Street Folly
The last few days have everyone wondering whether the rally can continue. Is the market's move supported by the fundamentals, and can the economy recover fast enough to drive further earnings growth? Looking strictly at reported earnings so far this quarter, S&P 500 companies continue to report significantly better than expected results. In the previous quarter the average difference between EPS estimates and reported EPS was $0.08, this quarter it is $0.09; furthermore, the ratio of companies that beat earnings to those that missed is 6.25 (150 beats vs 24 misses). This earnings season has been met with skepticism and scrutiny, but the numbers so far have been better than any period during the '02 - '07 bull market.
There are more bears than bulls in this week's poll.
Blogger Sentiment Poll Participants: 24/7 Wall St (-) Carl Futia (+) Dash of Insight (N) Elliot Wave Lives On (-) Fallond Stock Picks (-) In the Money Learning Curve (-) Maoxian Millionaire Now (-) Navivest (N) Peridot Capitalist (-) Quant Investor (N) Smart Money Tracker (-) Traders-Talk (+) Wall Street Folly Wishing Wealth (+)
Laszlo Birinyi will appear as a guest on tomorrow's airing of Squawk on the Street at 10:00.
The Ticker Sense Blogger Sentiment Poll is a survey of the web's most prominent investment bloggers, asking "What is your outlook on the S&P 500 for the next 30 days?" Conducted on a weekly basis, the poll is sent to participants each Thursday, and the results are released on Ticker Sense each Monday. The goal of this poll is to gain a consensus view on the market from the top investment bloggers -- a community that continues to grow as a valued source of investment insight. © Copyright 2009 Ticker Sense Blogger Sentiment PollTicker Sense was founded and developed by analysts at Birinyi Associates. Birinyi Associates continues to own and manage all content.
