As we see the futures getting hammered on the Dubai news it’s important to revisit market sentiment. As we noted last week, sentiment had become extremely lopsided. The Investors Intelligence survey is showing levels not seen in 5 year. David Rosenberg notes:
we saw the Investors Intelligence survey show that the share of bulls out there has risen to 50.6% from 46.1% a week ago; and the bear-share fell sharply to 17.6% from 21.3% — the lowest it has been in five years.
While this is by no means a surefire indicator it is certainly a clear sign of the extreme complacency in the market and the susceptibility to swift downturns.
Source: Gluskin Sheff