Mood Shift Can Send Shorts Scrambling

This column was originally published on Street Insight on Jan. 23 at 2:07 p.m. ET. It's being republished here as a bonus for readers. For more information about subscribing to Street Insight, please click here.

I have heard and read numerous bears insinuate or flat-out state that they are the only ones who are bearish, which is one of the surreal aspects of the current U.S. "negativity bubble."

My colleague Doug Kass says to look at what investors are doing, not what they are saying. However, I look at both. I would argue that gauges of herd sentiment, more than any other single investor tools, have been the best at timing the market over the long term. The trick is interpreting these gauges properly.

Few Looking for a Real Rally

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