Tuesday, April 19, 2005


Recently I posted charts indicating the level of negative sentiment. Negative sentiment is a contrary indicator; stocks normally go up about the time most traders are sure that they will not. In addition to continuing to find negative comments on blogs, such as "this is probably a dead cat bounce" I have found full service brokers to be hurting. The months of sideways movement in stocks have slowed investment activities. At a Merrill Lynch office in the eastern and western sections of NC, brokers speak in depressing words about the market and business prospects.

Public attitude is reflected in the brokers words. Real estate is still hot but stocks are not. It is time to sell rental real estate property and time to buy stocks. The crowd will probably push real estate higher this year. It is a game of chicken to hold for the peak price. Ironically the peak in real estate will probably be supported by the next run in stocks. Everyone will be feeling great when stocks run, oil prices fall and real estate peaks. You have to remember that peaks are not noticeable until one is able to sneak a peak in ones rear view mirror.