The Negativity Bubble Is Alive And Well

The market is mixed this morning, with the S&P a bit higher and the Nasdaq a touch lower. Cisco (CSCO) is weighing on the Nazz after UBS said that the company is facing challenges due to the slowdown in the U.S. and Europe.

Alcoa (AA) kicked off earnings season last night with a solid report, and the stock is higher. And after a multi-day selloff, materials stocks (steel, coal, ag, etc) are bouncing back sharply. Some steel stocks are up as much as +10% today.

Oil is getting a bounce after a big drop yesterday. Inventories showed a bigger than expected drawdown today, and crude prices are hovering above $136. The dollar is slightly weaker today vs. the Yen and Euro.

Asian markets were higher across the board overnight, led by India and China. European bourses are also higher so far. The 10-year yield is down a tick to 3.87%.

Financials are under a little pressure so far, after a nice bounce yesterday. Biotechs are again leading the way, which bodes well for growth stocks. AAPL and GOOG are also slightly in positive territory.

The weekly Investor's Intelligence survey came out today, and showed a surprising drop in the number of bulls. The number of bulls responding fell to 27%, while the bears moved higher to 47%. This is the highest number of bears since September 1998.

Additionally, this is the lowest number of bulls since July 1994. That is remarkable. This means that there are fewer bulls currently that after LTCM in 1998, after the 9/11 attacks, and at any time during the 2000-02 bear market.

Who says there is no negativity bubble?

long AAPL, GOOG