Somewhat good news for those that are hoping for a
rally in the markets.
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The CBOE put/call ratio tells us the public is still overly bearish following the panic of two weeks ago. There’s hardly a bull among the retail investor crowd right now, which supports the stock market’s “wall of worry.” And even the volatile AAII investor sentiment poll is net neutral with only 36 percent of investors expressing any bullish sentiment against a 36 percent bearish sentiment.
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Moreover, the number of stocks making new 52-week lows has been contracting in recent days since the selling panic, indicating a diminution of internal selling pressure. This is important following a huge decline, for if the new lows were to remain stubbornly high for several consecutive days it would mean the market is more than likely setting up for another decline.
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