Investors Intelligence “Correction” Percentage

The latest data from Investors Intelligence on their bull-bear spread show a dead heat.  Both numbers are at 28.8%, meaning that the numbers of investment advisors and newsletter writers in their survey are exactly equal.  But interestingly, both numbers are also very small, which has importance for this week's chart.

The advisors in their survey which Investors Intelligence cannot categorize as either bullish or bearish get put into a 3rd category which they call "correction".  And it turns out that this number can get really interesting sometimes, like right now.

Because both bulls and bears are at very low numbers, that leaves a lot of the survey population unwilling to make a commitment.  This number is at 42.4%, which is the highest number since the stock market price lows of August and September 2015.  What this says is that a large part of the survey group is not willing to make a commitment to either a bullish or bearish stance.  That is a condition reflecting fear not just of the market but fear of making a commitment, and not surprisingly it is a good marker of price bottoms.

The big caveat to this is that at the beginning of the 2022 bear market, we saw a reading of 40.0% for the correction group.  While that high reading did mark a temporary low for prices in early 2022, that was not the end of the story.  As a bear market becomes much more evident to more people, they get more willing to make a commitment to say that they are bearish.  So if we are entering another bear market now like 2022, this current very high reading for the percentage of advisors in the "correction" category may be only a marker of a temporary bottom for stock prices.