Roger Nusbaum has not been feeling optimistic about the stock market of late.
The Big Picture for the Week of March 20, 2005
I wrote something early in the week opining that I felt the likelihood of down a lot was now greater than it was before. I still hope I will be wrong but the continued deterioration of just about everything but oil has not made me feel any better
I will stick with my oft stated plan of waiting for a breach of the 200 DMA. I do not want to try to outguess what may come next, in case I'm wrong. It is important to have some discipline and I think I do.
The pessimism is understandable. US stocks were down last week, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all falling. The Nasdaq in particular has fallen to a four-month low.
But Nusbaum isn't the only one to feel pessimistic. In a recent MarketWatch commentary, Mark Hulbert said that investor sentiment in general has been falling.
Each market correction seems to cause yet more previously-bullish advisers to throw in the towel. This typically is not what is seen at the beginning of major market declines... As of Thursday night's close, the [Hulbert Stock Newsletter Sentiment Index] HSNSI stood at 15.5 percent. As recently as March 9, when the Dow Jones Industrials Average closed at 10,806, the HSNSI stood at 38.1 percent. So the HSNSI has dropped nearly 23 percentage points in six trading sessions...
[T]he net effect of the stock market's gyrations this year has been to make the Dow Industrials in the low 10,600s look a lot more discouraging than it did before. And that's just another way of saying that a wall of worry is being built. And, as contrarians never tire of saying, bull markets like to climb a wall of worry... And so...there is a silver lining in the dark cloud of the market's recent decline.
Nusbaum may yet prove right in holding on.