• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

My, How Quickly We Change Our Views

The banks are changing their stance, so let's see what the indicators say.
By HELENE MEISLER
Apr 14, 2020 | 06:00 AM EDT
Stocks quotes in this article: JPM, MS, GS

We are about to step into earnings season where pretty much everyone is in agreement that the first quarter earnings don't matter. Quite frankly neither do the second quarter earnings. My question is when will folks care about earnings again? Is it the third quarter or the fourth? Or maybe they prefer to wait until 2021?

I obviously don't have the answer, but what I do know is that even the fundamentally inclined folks don't care about earnings. So, how are those fundamentalists going to form a view on stocks here? I know you, too, are wondering.

Have no fear. On Monday we saw the strategists at Goldman Sachs (GS) , Morgan Stanley (MS) and JPMorgan (JPM) all say the low is in and stocks will go up from here. Oh some said "buy dips" and some said, "new highs are coming," but the message was the same: a change in sentiment.

If you are wondering how we get those Investor's Intelligence bulls and bears to switch places (as of last week there were more bears than bulls but I expect that has shifted this week) then look no further than these investment banks. If you wonder how we will get the four-week moving average of the American Association of Individual Investors' bears to move down, look no further than these view by the banks.

Just remember how the narrative about the Fed has shifted. We have gone from "rate cuts can't cure the virus" to "don't fight the Fed." I do not expect this shift to happen overnight; the low was only three weeks ago. Recall when the market was falling and folks were upset because the Citi Panic/Euphoria Model did not show Panic yet? It takes time to shift that sentiment.

Witness that while still relatively high at 92% the put/call ratio on Monday was the lowest it has been in three weeks. The ISE call/put ratio was quite high. I don't discuss this sentiment indicator very often, but think of it as the inverse of the put/call ratio (which comes from the CBOE). A high reading in the ISE is like a low reading in the CBOE, meaning too many calls relative to puts.

The ISE was the highest reading since November. Yes, November! This means its 10-day moving average has finally seen a rise. While the 10-day moving average of the CBOE's put/call ratio has come down, the ISE's 10-day moving average has barely budged until Monday. It is now on the rise.

So that's how we begin to see the sentiment shift. Aside from that the short term overbought reading gave a small pullback but the intermediate term is not yet overbought. That means Monday looked fairly standard to me. We will watch to see if any of the indicators change in the days ahead. For example, will breadth begin to falter? Will it falter enough to change the indicators? And most importantly, how fast do people shift their market views from bearish to bullish?

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investment Banking | Investing | Stocks | Technical Analysis | Banking |

More from Stocks

It's a Mess Out There

James "Rev Shark" DePorre
Apr 19, 2021 4:26 PM EDT

Let's see how the market reconciles some of the most significant divergences in many years.

Jim Cramer: The House of Pain Stocks vs the House of Pleasure Stocks

Jim Cramer
Apr 19, 2021 4:05 PM EDT

Amazingly, one group isn't just left behind, it just keeps losing money, while the other group is shrugging off this day with aplomb.

Are We Seeing an Interim Top in Copper?

Bruce Kamich
Apr 19, 2021 3:04 PM EDT

Dr. Copper is back to levels not seen since 2011.

Lithia Motors Could Correct Before Making New Highs

Bruce Kamich
Apr 19, 2021 2:15 PM EDT

Consider a correction to be a buying opportunity.

The Market Has Been Forgiving for Way Too Long

Timothy Collins
Apr 19, 2021 2:09 PM EDT

At some point, the momentum and frothy traders will return, but the current action should be a solid lesson.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login