Sign in
Become a MarketWatch member today
Mark Hulbert
March 15, 2011, 2:10 a.m. EDT
View all Mark Hulbert "º
"¹ Previous Column
March Madness and your portfolio
First Take "º
H-P's Apotheker seeks to differ from Hurd
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) "” OK, all you contrarian-oriented investors.
Now's the time to see if you actually walk the walk, not just talk the talk.
You say that the time to buy is when the blood is running in the streets. Well, now would certainly seem to be just such a time, with gruesome and tragic reports from Japan dominating the news headlines.
How many of you are stepping up to the plate to buy?
/quotes/comstock/10w!i:dji/delayed DJIA 11,993, -51.24, -0.43%
A few of you, to be sure: The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,993, -51.24, -0.43%) did rally a hundred points Monday afternoon from its intraday low, closing down just 52 points.
But only a few of you: Fear continues to dominate the market. The majority of investors are not stepping up to the plate to buy.
One straw in the wind in this regard is the average recommended equity exposure among the shortest-term market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). Even prior to the devastating earthquake that struck Japan late last week, this average exposure level was not particularly high "” and it has dropped even more in the wake of that tragedy.
At the end of February, for example, the HSNSI stood at 58.2%. By last Thursday night, this benchmark had already dropped to 49.1% "” and since then has dropped even further to 43%. This is a surprisingly big drop, given that the Dow "” at least so far "” is only about 3% below its bull-market high, hit in mid-February.
This fear factor is even more in evidence among market timers who focus on just the Nasdaq market "” an arena where the mood among retail investors particularly predominates. The Hulbert Nasdaq Newsletter Sentiment Index (HNNSI) currently stands at just 20%, down from 73% on the date of the market's mid-February high.
This retreat of the bulls is not what is normally seen at the beginning of a major decline. If the bull market had truly ended at its mid-February high, and sentiment adhered to the typical pattern, then the bulls would have stubbornly clung to their positions "” if not actually increased them in the wake of the decline, treating the market's weakness as a buying opportunity.
This is what happened at the top of the bull market in March 2000, for example. In the wake of the Nasdaq's first 10% correction then, believe it or not, average recommended exposure levels actually jumped markedly. This time around, in contrast, the market has dropped just 3% and, far from jumping, the HSNSI has dropped 15 percentage points and the HNNSI has dropped 53 percentage points.
This doesn't guarantee that the bull market still lives, of course. But it does mean that the sentiment winds, at least for the moment, are blowing in the direction of higher prices.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
Add Comment › · Recommend · Post: Alert Email Print More Mark Hulbert March 11, 2011 March Madness and your portfolio March 9, 2011 How bull market stacks up against history March 8, 2011 Deflation worries receding fast March 4, 2011 Sentiment increasingly a short-term tool March 2, 2011 The investment lesson of Buffett's career Explore related topics Dow Jones Industrial Average Comments Screener About Mark HulbertMark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD became a service of MarketWatch in April 2002. In addition to being a Senior Columnist for MarketWatch, Hulbert writes a monthly column for Barron's.com and a column on investment strategies for the Journal of the American Association of Individual Investors. A frequent guest on television and radio shows, you may have seen Hulbert on CNBC, Wall Street Week, or ABC's World News This Morning. Most recently, Dow Jones and MarketWatch launched a new weekly newsletter based on Hulbert's research, entitled Hulbert on Markets: What's Working Now.
First Take H-P's Apotheker seeks to differ from HurdH-P Chief Executive Leo Apotheker hosted his first in-person meeting with investors, and while the strategy isn't hugely divergent, his approach is.
11:35 p.m. March 14, 2011
Most Popular Most readMost commented Japan stock crash threatens global markets Tokyo radiation levels 23 times normal: officials Worse than Japan? Maybe our reaction Japan's nuclear troubles deepen with new blasts Tokyo residents monitor unfolding nuclear crisis The best laid plans ... U.S. stocks drop; GE hit by nuclear concerns Japan stock crash threatens global markets Nuclear winter? Quake casts new shadow on reactors Japan prime minister: High risk of radiation leak Find a Broker Partner Center » MktwHulbert's Latest Tweets"Mark Hulbert: Fear grows "” a contrarian good sign http://on.mktw.net/hr9tVL" 2:02 a.m. EDT, March 15, 2011 from MktwHulbert
"Mark Hulbert: March Madness and your portfolio http://on.mktw.net/iksFk9" 12:23 a.m. EST, March 11, 2011 from MktwHulbert
"Mark Hulbert: How bull market stacks up against history http://on.mktw.net/gwR81j" 12:45 a.m. EST, March 9, 2011 from MktwHulbert
"Mark Hulbert: Deflation worries receding fast http://on.mktw.net/e9aq6Z" 12:02 a.m. EST, March 8, 2011 from MktwHulbert
"Mark Hulbert: Sentiment increasingly a short-term tool http://on.mktw.net/f4vRdn" 1:26 a.m. EST, March 4, 2011 from MktwHulbert
/quotes/comstock/10w!i:dji/delayed Dow Jones Industrial Average (DJIA) /marketstate/country/US The market is open5:59:04 am The market is closed5:59:04 am 11,993 Change -51.24 -0.43% Volume 163.00m Real time quotes var embeddedchart70394702Chart = new EmbeddedChart('#embeddedchart70394702', NormalChartStyleNoDecimals, 190, 90, '1dy', '5mi', null, null, null, 'US:DJIA'); jQuery.data($('#embeddedchart70394702').get(0), 'embeddedchart', embeddedchart70394702Chart); Add to portfolio DJIA Find a Broker Create alert Featured Commentary » Next: Mark HulbertOn the Markets
The retreat of the bulls may be good sign
Next: Paul B. FarrellBehavioral Economics
Toxic Charlie Sheen virus infects the Street
Next: Andrea Coombes' Ways and MeansWays and Means
Retirement savers' confidence plummets
Next: David Weidner's Writing on the WallWriting on the Wall
How we make the Japan tragedy worse
Next: Therese Poletti's Tech TalesTech Tales
San Francisco's next tech boom lifts hopes
Next: Irwin KellnerThe Economist's Corner
Fed must weigh jobs vs. prices
Next: Brett Arends' ROIROI
Contrarian's trouble with new bubble
Next: Robert PowellOn Retirement
Five steps to creating a great retirement
Next: Jon Markman's SpeculationsSpeculations
Could quake jolt Japan from its slumber?
Next: Peter BrimelowWall Street Irregulars
Adens, Schultz, Batten Down Hatches
Next: Craig Stephen's This Week in ChinaThis Week in China
Beijing on affordable-housing spree
Next: David Marsh's Marsh on MondayMarsh on Monday
Europe still hopes to muddle through
More BigCharts Virtual Stock Exchange WSJ Asia WSJ Europe WSJ Americas WSJ Chinese Financial News Online SEARCH 5:59 AM EDT March 15, 2011 /marketstate/country/us New York Closed /marketstate/country/uk London Open /marketstate/country/jp Tokyo Closed /marketstate/country/us /marketstate/country/uk /marketstate/country/jp View All Latest News /news/latest8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883285:54aGE shares slump 9% in premarket trading
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883275:29aDow futures down 285 points to 11,642
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883265:21aBREAKING
General Electric shares drop 7% in premarket trade
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883255:18aBREAKING
Dow futures down 228 points to 11,698
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883245:18aGermany's DAX 30 index drops 3.8%, extending fall
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883234:56aTokyo stocks plunge, leading heavy losses in Asia
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883224:54aU.S. stock futures slump; Nikkei slides 11%
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883204:35aEurope stocks slump in wake of Tokyo plunge
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883194:19aSiemens stake in Areva NP valued at 1.62 bln euros
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883184:19aChina's foreign investment up 32% in February
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883174:13aElbit Systems net off 19%, revenue up 12%
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883164:08aIndian stocks slump as Nikkei plunges
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883154:08aNasdaq 100 futures down 36.50 points to 2,253
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883144:07aS&P 500 futures down 22.40 points to 1,268.10
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883134:07aDow futures down 179 points to 11,747
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883124:04aRWE AG shares open down more than 5%
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883114:04aE.On AG shares slump nearly 8% in Frankfurt
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883104:03aEurope stocks tumble in wake of Tokyo plunge
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883094:03aGermany's DAX 30 index sinks nearly 3% at the open
8c077dc4-5ad2-4f73-b9c3-a381c5fece05:2883084:03aAreva shares slump 9.5% in early Paris trade
Loading more headlines... dow /quotes/comstock/10w!i:dji/delayed 11,993 -51.24 -0.43% nasdaq /quotes/comstock/10y!i:comp 2,701 -14.64 -0.54% s&p 500 /quotes/comstock/21z!i1:in\x 1,296 -7.89 -0.60% Kiosk 1240977600000 1272513600000Commentary
John C. DVORAK Cookie-cutter electronics A trip to your local big-box retailer will reveal the truth: Almost everything they sell these days is a commodity product. 133829 1266296400000 1266296400000Commentary
Looking for clarity Tullow Oil, locked in a tax dispute with the Ugandan government, is hoping for some clarity now that the country's election is over. (Commentary) /conga/kiosk/commentary2.html 133880 1238860800000 1270396800000ETF Investing
john Spence Copper's drop has ripple effect Sharp pullback has weighed on exchange-traded products following the industrial metal, as well as funds tracking materials stocks and Chile. 133823 1240977600000 1272513600000Retail
Jeweler jarred by Japan Luxury brands are big in Japan. Tiffany, for one, does a fifth of its business there. Investors are betting Monday that disaster will alter consumer behavior. /conga/kiosk/retail.html 133858 1251921600000 1251921600000SportsWatch
Kicking off MLS season Major League Soccer kicks off its 16th season this week hoping to build on recent success. "¢ Read more on the business of sports /conga/kiosk/wildcard2.html 133881 MarketWatch.com Site Index Topics Help Feedback Newsroom Roster Media Archive Premium Products Mobile Podcasts RSS MarketWatch on Facebook MarketWatch on Twitter Company Info Code of Conduct Corrections Advertising Media Kit Advertise Locally License our Content WSJ.com Barron's Online BigCharts Virtual Stock Exchange All Things Digital MarketWatch Community Financial News Online WSJ.com Small Business FINS: Finance, IT jobs, Sales jobsCopyright © 2011 MarketWatch, Inc. All rights reserved. By using this site, you agree to the Terms of Service and Privacy Policy.
Intraday Data provided by Thomson Reuters and subject to terms of use. Historical and current end-of-day data provided by Thomson Reuters. Intraday data delayed per exchange requirements. Dow Jones Indexes (SM) from Dow Jones & Company, Inc. All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More information on NASDAQ traded symbols and their current financial status. Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. Dow Jones Indexes(SM) from Dow Jones & Company, Inc. SEHK intraday data is provided by Comstock and is at least 60-minutes delayed. All quotes are in local exchange time.
MarketsMarkets Data is loading... QuotesQuotes Data is loading... My PortfolioMy Portfolio Data is loading... My AlertsMy Alerts Data is loading... CommunityCommunity HOT PICKS Read Full Article »