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Sentiment Signals S&P 500 Retreat May Not Be Over – Bloomberg

Sentiment indicators have yet to show signs of extreme pessimism during the Standard & Poor’s 500 Index (SPX)’s retreat since April, suggesting there is still room for bears to push the market lower, according to UBS AG.

While the proportion of newsletter writers who said they are bearish on equities rose to a two-month high of 26.6 percent last week, it’s still below the peak of 46.3 percent reached in October, when the S&P 500 hit its 2011 low, according to data from Investors Intelligence compiled by Bloomberg. The New York Stock Exchange Short-Term Trading Index, a volume-based market breadth indicator, reached a 2012 peak of 2.52 last month, failing to break 3.0, a level that Michael Riesner and Marc Mueller of UBS consider a sign of capitulation.

“The missing panic sell-off and the low levels of bearishness are suggesting that we still have a high level of complacency in the market…”

via Sentiment Signals S&P 500 Retreat May Not Be Over – Bloomberg.

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