FIRST, A CORRECTION – I bought the OCTOBER BBRY PUTS with strikes from $11-14. NOT THE SEPTEMBERS. SORRY for the confusion.
One of the first lessons I learned on Wall Street was that the markets tend to make a fool out of the most number of participants as often as it can. That market is not always a nice guy. That is, when sentiment among traders and investors gets wildly one-sided, either bullish or bearish, the market will often put in an immediate move in the opposite direction from what all that extreme sentiment was expecting.
Since I first started my blog on Marketwatch a few years ago and back for years on my other blogs, I’ve occasionally asked, “Who’s more scared right now, the bulls or the bears?” to try to get an idea of when the sentiment of the mainstream trader and investor has gotten lopsided.
For example, back almost exactly two years ago, the poll showed 99% and then 100% “Bulls are more scared” readings in August and September 2011.
Results on September 21, 2011 – 100% “Bulls were more scared”: http://blogs.marketwatch.com/
Three months after that poll, the market was up 10%.
Results on August 29, 2011 – 99% “Bulls more scared”: http://blogs.marketwatch.com/
Three months after that poll, the market was up 11%.
Results on July 11, 2012 85% “Bulls more scared”: http://blogs.marketwatch.com/
Three months after that poll, the market was up 9%.
Since I’ve been on Marketwatch starting back in 2009, there’s never been a 85% or higher reading of “Bears more scared”. That’s reflective of the bull market that we have indeed seen bubbled up since 2009.
So, the upshot is that it’s time for another round of Wall Street’s favorite TV Game Show, “Who’s more scarred right now, the bulls or the bears?” You can email me you answer at firstname.lastname@example.org, or leave a comment below or just go take the poll itself.