Thursday, October 19, 2006

Investor Sentiment Check

Measures of investor anxiety are running around average levels, with some exceptions.

The ARMS index is still high. One of my colleagues told me the 3-day ARMS is as high as it was back in July. This is indicative of the bears trying to press their bets, imo.

The CBOE put/call ratio is running around average levels at 0.82.

The ISEE is still below average at 135. The 50-day moving average of this indicator is now down to 111.

Tomorrow is options expiration. Many times the market experiences a post-options expiration hangover in the following week. But I continue to believe that any pullback will be minor, and that this market will not give an ideal opportunity for bears to cover or for underinvested managers to deploy cash.


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