Friday, September 07, 2007

Investor Angst On The Rise

The market continues to selloff today, and it does not look like we will get much of a bounce into the close. But this is part of the process of working off the overbought condition, even the selloffs are somewhat severe.

On the plus side, our investor anxiety indicators are spiking, a necessary ingredient to help stem the decline. To wit:
  • Bears exceeded bulls in the AAII survey for the 4th straight week
  • The ARMS Index spiked above 3.25, a rare occurrence
  • The put/call ratio is elevated at 1.10
  • The volatility indexes are surging more than +10% today

Many are beginning to worry that the Fed rate cuts won't help. I am not in that camp. I believe that they will help, and that the financials will rally and boost the overall market. Patience is key.


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