When Pessimism Reigns Supreme

Even though the market is sitting near all-time highs, negative sentiment remains prevalent Wednesday, June 12th, 2013     When Pessimism Reigns Supreme   One year later, bears still roam free The most important bottom since 2011 Plus: Only price pays…   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner What were you doing last summer? No, I don't want to hear about your road trip to the world's largest ball of string… I'm talking about what you were doing in the markets. How did you feel about stocks? Were you a buyer as the market put in its most significant bottom since the 2011 eurozone crisis? If your answer is no, then I have to ask: What were you thinking? My guess is you were taken in by the flood of negative sentiment that permeated every corner of the markets. Stocks had just coughed up all of their gains for the year. Analysts and pundits feared the worst. Here are some of my notes from June 2012: After expecting earnings growth in S&P 500 stocks as recently as last month, analysts are pumping the breaks and getting bearish... The negativity is quickly trickling down to consumers. Yesterday's consumer confidence report revealed a 10% jump in consumers who believe stock prices will decline in the near future. In only one month, the percentage of bears went from 32 to 42. That's a massive increase in just 30 days… At the time, I noted that the "bear trade" was looking crowded. Pessimism was reaching its outer limits. It was becoming clearer by the day that a turning point was near… This year has been a little different (so far). In the U.S., stocks have held on to most of their gains. But even though the market is sitting near all-time highs, negative sentiment remains prevalent. If you told me one year ago that the S&P would rise more than 300 points, I would have believed you. But if you said that the push to new highs would not massively impact bearish sentiment, I would have laughed. Yet that's essentially the situation today. Bullish sentiment among newsletter writers fell to 43.8% this week, according to Bespoke Investment Group. That's its lowest level since December. Almost everyone is waiting for a big correction… I still believe we're in for some summer choppiness. The market needs to churn. But I'm not anticipating a major shock to the downside at this point. It's safe to hang on to the names you bought earlier this year.     Rude Numbers Targets, Predictions and Wild Guesses   $1.3 billion was just enough cash to help Google snag social mapping service, Waze. It's rumored that Google will integrate the Israeli company's user-engagement culture into its own universe—and potentially steal another slice of the tech pie from Facebook and Apple… $37.72 is where shares of video game retailer GameStop ended yesterday's session. That's a 9% rise on a weak day for the market thanks to a bump from E3 conference announcements... $21.70 is where you'll find silver futures this morning. That's more than $1 lower than its Friday highs. Meanwhile… 1,635 marks the spot for the S&P early this morning. The broad market is trying its best to win back most of yesterday's losses. $109 buys a Bitcoin this morning. Solidly back in triple digits after last weekend's tumble…     Rude Trends When to Buy... When to Sell   "For good or worse I am hanging in there," writes a stubborn reader offering up his take on gold. "The finaglers can only play their game so long, and then gold has to shoot sky high." Gold doesn't have to do anything. It doesn't have to conform to your worldview. It's traded on an open market like every other commodity. It's just as susceptible to buying and selling pressure. Of course, this also means drawdowns and bear markets. The minute people really begin to believe that the rules don't apply to whatever they are trading is the exact moment you should become skeptical… Gold went straight up for more than a decade. Even if you were five or six years late to the party, you're still sitting on tremendous gains. Why waste them? What are you trying to prove? You're not going to win an award for your loyalty. You can't write your congressman a note about how you've held gold forever and you deserve a refund. Only. Price. Pays. Period. [Ed. Note: The Rude Pro is up and running! Check out all of my latest investing ideas for free here. Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   A story about guns, money and investors who could use both to get rich. Panic In The Oval Office? Could This Keep Obama Up Late? Claims Four Weeks of The Rude PRO... 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