Complacency Is Making the Contrarians Nervous

Contrarian investors who heeded their mantra of never trusting the masses had a sweet ride in 2003, switching from bear to bull last March when pessimism was rampant. How will they know when it's time to turn again?

Here's where we would look for direction.

Sentiment Surveys

Published every Wednesday morning, the Investors Intelligence survey has been widely adopted by the investment community as a contrarian indicator since its inception in 1963. Investors Intelligence studies over 100 independent market newsletters and assesses each author's current stance on the market: bullish, bearish or correction. Investors looking for a correction are defined as being "still optimistic on the markets but are waiting to buy at lower levels on a pullback," says Investors Intelligence editor John Gray. ...