The CBOE Volatility Index hit 42 intra-day when the market was down during the middle of the trading session. During the past few days, there has been a very large percentage of stocks hitting new 52 week lows verses new 52 week highs. Down volume vs. up volume was also heavy to the downside.
The Nasdaq Liquidity Premium (which indicates whether investors are going towards more liquid investments such as ETF's as opposed to stocks), shot up to the same level as October of last year, and the highest reading going back to 2003.
Put/Call ratios have also been very high meaning more investors were buying puts than calls (either hedging their stock positions, or betting on a market decline).
Short selling among small investors was also high and newsletter sentiment is still bearish. It has been for quite some time.
All of these ave very good contrarian indicators for stocks to potentially continue moving higher, or keep further declines smaller than what they might otherwise be.
The headlines during the past few days would almost make one think that the world was coming to an end. In Asia, asset managers were describing how people were selling in a panic. There were also headlines here how investors were fleeing to the safety of Treasuries, and moving into Bonds. The sub $1.00 Reserve fund money market price ($0.97) also spooked investors and made for more headline hysteria.
All of this bad news, and the big down days this week might have done the job of scaring out the last holdouts in the market.
Arthur Daret