Bears Are Waiting for Something to Break

Investors Intelligence Bull/Bear Ratio (BBR) remained under 1.0 during the June 28 week at 0.82 for the ninth consecutive week. It has been bouncing around 1.00 since late February. In other words, it hasn't worked as a short-term contrarian indicator given that the S&P 500 has been falling since it peaked on January 3. However, the BBR might have signaled at least a short-term bottom on June 16 when the S&P 500 closed at 3666. That week (through June 21), the BBR fell to 0.60, the lowest since the March 9, 2009 bear market low. In other words, sentiment is already as bearish as it was back then, but the S&P 500 is down roughly half as much this time, so far. Here are a few more related quick takes:

(1) Bullish sentiment jumped this week to 32.9% from 26.5% the prior week, while bearish sentiment dropped to 40.0% from 44.1%.