A prominent sentiment survey shows the number of bears rose in the latest week despite the sharp rally in stock exchange traded funds on easing worries over Europe’s debt logjam.
The Investors Intelligence survey revealed that bearish sentiment rose to 46.3% from 45.2%, while bullish sentiment held steady at 34.4%, according to reports.
The spread between bulls and bears has increased after recently hitting its widest levels since March 2009. [ETFs Bounce as Sentiment Spread Hits March 2009 Level]
“This survey is likely dated by a few days but the sustained level of bearishness despite this rally is quite amazing,” wrote Tsachy Mishal at Capital Observer on Wednesday. “It seems we are gapping up again and the risks of a short term pullback are increasing. However, with so much bearishness out there and strong seasonality a couple of weeks away I believe the bulls still deserve the benefit of the doubt in the intermediate term.”
Other sentiment indexes show investors remain very pessimistic, MarketWatch’s Mark Hulbert reports. “This is very encouraging news, from a contrarian point of view,” he wrote.