It Pays To Watch the Bull-Bear Ratio Indicator Here

bull-bear-ratio-01.jpgWhen you see the Bull-Bear Percentage Ratio get to current levels, it usually indicates an important bottom. Every week a poll of investment advisors is taken by Investor’s Intelligence of New Rochelle, New York. The poll tracks investment advisors, to see whether they are bullish, bearish, or neutral on the stock market.

The Bull/Bear Ratio shows the percentage relationship between the bullish and bearish advisors. High readings of the Bull/Bear Ratio are bearish (there are too many bulls) and low readings are bullish (there are not enough bulls).

Current levels indicate the bulls down to 36.7%, and the bears at 35.6%. When the bulls get below 40%, it’s usually time to start thinking long. While it’s time to start shorting, when the bulls get over 60%.

Cramer mentioned it in a column on Wednesday,

“OK, this is really important. One of my most beloved indicators, the bull-bear ratio, has hit a level that simply means you cannot have a big hit to this market, and that level is the 36% bull level.

I know I am not a chartist, but I have sworn by two technical indicators all my trading life: the S&P Oscillator and the bull-bear ratio.

Any time we get severely oversold, I hold my nose and buy, any time we get the bull cohort below 40%, I have to buy something, and when it gets too close to 35%, you have to cover all shorts and get long.”

An indicator to ponder as the market tests important levels here intraday.

5 thoughts on “It Pays To Watch the Bull-Bear Ratio Indicator Here”

  1. I AM ABOUT TO START INVESTING IN THE STOCK MARKET BUT I DON’T UNDERSTAND THE READING OF THE BULLS AND BEARS TO UNDERSTAND THE MARKET BETTER.
    PLEASE CAN YOU GIVE ME AN IDEA ON HOW TO READ AND WHEN YOU NEED TO BUY AND SELL IN THE MARKET.

  2. Hi Leonard,

    The bull/bear ratio is just one piece of the puzzle. It’s a sentiment indicator. Search the term and you’ll find some good definitions.

    As for using the ratio to invest, when the bulls are getting pessimistic and down on the market, they’re feeling the effects of a bad market. The tide will eventually turn, and it’s probably wise to start buying some.

    As I said, it’s one piece. I’d use the charts and technical analysis to get the primary read and use this ratio as a secondary tool.

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