The 1-week rate of change in Investors Intelligence bears has spiked to 12.5%.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what it shows:
The blue line in the top panel represents the price of the S&P 500 index.
The green bars in the bottom panel show the 1-week change in Investors Intelligence (II) of more bears.
The red bars in the bottom panel show the 1-week change in Investors Intelligence (II) of less bears.
The Takeaway: Last week, I noted that more bears were beginning to enter the market. We have now experienced a further surge in bear activity, with the II bears reaching the highest level of bears since January 2023. This also marks the highest one-week rate of change that we’ve seen since March 2020.
Bearish spikes of this size typically occur around market lows, especially during drawdowns exceeding 20%. However, this particular spike in bears has occurred while the S&P 500 is only 1.5% away from its all-time highs.
So, does the S&P 500 follow the usual pattern and rip higher from here? Or is this time different?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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