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WhisperNumber.com's Market Confidence Reports


MARKET CONFIDENCE 101

We believe the following two statements best summarize market confidence data:

  • When market confidence reaches an 'extreme high', it signifies the last buyer has bought. As the market no longer has any buyers, prices can only go down.

  • When market confidence reaches an 'extreme low', it signifies the last seller has sold. As the market no longer has any sellers, prices can only go up.

    These statements provide the basis of our data and reports.

    ABOUT CONFIDENCE SURVEYS

    Most investors have heard of the 'Consumer Confidence' and 'Consumer Sentiment' reports. These survey's measure the level of confidence individual households have in the performance of the economy. In layman's terms that means they provide a snapshot of whether or not consumers feel like spending money. While these reports may gain a great deal of media attention, they have not proven very useful for the individual investor. They are run once a month, results are released weeks after they've been gained, and they don't survey investors.

    We thought that measuring the confidence of actual investors would be a much more useful survey. A survey that was conducted twice as often, focused on specific markets, and was released within just a few days after results were gained. For the past ten years WhisperNumber.com has conducted financial markets survey's. This is the only service that polls traders and covers the US and international stock markets, ETF's, bonds, US interest rates, and commodities index.

    OVERBOUGHT & OVERSOLD MARKETS

    An extreme high reading is considered an indicator of an 'overbought' market (again, a market that no longer has buyers). An extreme low reading is considered an indicator of an 'oversold' market (again, a market that no longer has sellers).

    Take for example a recent extreme market reading from our Market Confidence Report. In our May 30th survey, investor confidence jumped to a 52 week high indicating an overbought market for the Dow Jones Transports (^DJT). This meant weakness could be expected as the market no longer had any buyers. At that time the price of the DJT was at 5408. Within five trading days the market was 2.9% lower as expected.

    CONFIDENCE or SENTIMENT?

    While a purist may find a difference between these two words, we don't. We consider both words to stand for 'an opinion, feeling, outlook, or belief'. Our surveys look for the opinions, feeling, outlook or belief of individual investors and the results have been extremely accurate.

    Call it what you will, but our focus is on the 'extremes' in our survey data - extreme high points and extreme low points. These points indicate a market that no longer has any buyers, or a market that no longer has any sellers. And these are the readings investors can take advantage of to make better trades.

    Just one anticipated market reading, just one early buy of an impending market move while everyone else stays on the sidelines, or a well-timed short sell, will pay for your subscription many times over. Subscribe to WhisperNumber's Market Confidence Report today!

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