The American Association of Individual Investors surveys its members every week to see if they are bullish, bearish, or neutral. This week’s data, released on Thursday, April 14, 2022, showed the most negative bull-bear spread since April 2013.
McClellan Financial 4/14/22
The last time investors were this overall bearish was the Covid Low in March 2021. Rather than collapse the market rebounded to new highs.
So a very bearish sentiment can actually be a hint that this is the time to buy. A similar period occurred between 1987 and 1992. We had a 1987 crash, a war in Kuwait, and a change in Presidents. This time we have a war in Ukraine, a change in Presidents, and renewed inflation.
So then as now we have similar conditions. The market tends to do what most least expect. And the Transports have been hit hard. In the last three weeks Transports dropped from 16,600 to 14,440. But they are rebounding as I write.
Interest rates continue to rise. The thirty-year Treasury Bond rose to 2.91% Thursday, quite a rise from the December low of 1.7%. Again while it may seem counter intuitive, it may well be that we are closer to a near term high in rates and a near term low in stock prices.
Crude Oil has bounced at $95 support several times since the March high of $130. Price advanced this week to $106.95. That makes the next target $115.
Countries have continued to build WWII type machines including tanks and artillery. But most everyone discounted the possibility of another protracted WWII struggle. The Afghans and Iraqis did not have the Minute Man Spirit to resist the Taliban. The Ukrainians, trained by NATO itself have done just that. The Moskva, Moscow, was sunk this week. That gives Putin the record sinking of a large ship since WWII.
Observers are wrong that Putin has lost control. Rather he is, like Stalin and Hitler, the personification of Evil. He has the stomach for killing and will do so until stopped. Will the West furnish enough heavy weapons to send him out of the Ukraine? He has lost nine colonels thus far.
As noted the FED and Team Biden have only fanned energy prices higher by injecting trillions into the U.S. Economy. Now prices are up but Putin is not to blame.
It is hard to see any near-term resolution but for that reason we may have one within a month.
