The bullish contrarian indicators just keep on coming . . .

Here are yet two more charts that highlight how the markets have reached levels where pessimism turned toward optimism in the past.  The first comes from Yardeni.com and the second from the Bank Credit Analyst.  The ratio of bulls to bears has dropped to a level consistent with the bear market bottom in 2002 and the bottom in 2009.  The second chart shows that hedge funds are extremely bearish consistent with the intermediate lows seen in the market in mid-2010.  If the present market rally continues we can expect material short covering and purchase of high beta stocks before year end as hedge funds move to reverse their bearish bets.  Jeb Terry, Sr. Oct. 22, 2011

Aberdeen Investment Management – a guide service for micro-cap technology investment

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