Inquiring minds are looking at a chart of Investors Intelligence courtesy of Bernie Schaeffer.







Bearish sentiment is the lowest in two years and I am also told at lows seen only 3 times in the last 25 years.



The Street Authority offers an explanation of the Investor's Intelligence Survey.



Each week Investor's Intelligence surveys approximately 150 market newsletter writers. They take this survey on Friday and release the results to the media the following Wednesday. These results can then be charted.



Like other sentiment indicators, the Investor's Intelligence figure is thought of as a contrary indicator. This is because the majority of investment advisors tend to trade with the prevailing trend. As the market becomes more bullish, their newsletter outlook and picks come increasingly from the long side. As the market declines, they will increasingly advocate a bearish position. Most of the time these investment advisors are correct. However, at major market turning points they can lag the market. It is in these scenarios that the Investor's Intelligence survey can provide traders with a contrary indicator.



The manner in which the survey is calculated is pretty straightforward -- bullish and bearish advisors are tabulated and the numbers in each camp are totaled together. The end result of this process is a percentage value -- the % of advisors who are bullish on the market's near-term prospects.

