XpresSpa Group Inc (XSPA)

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First it is not an argument unless you are making it one. It is an opinion and your premise is incorrect. I was simply stating a fact captured here by Mark Hulbert

"sentiment is negative so the stock must go up, since the stock must go up rulings must be coming."

The stock does not have to do anything it will do whatever the outcomes of the rulings are. The comment regarding timing on rulings is from several sources not sentiment, lawyers and professionals in the business.

CHAPEL HILL, N.C. (MarketWatch) — Be on your guard in coming weeks for declarations that market timing is dead.

That would be a warning sign that a market top may be imminent.

Is market timing dead?

Be on your guard in coming weeks for declarations that market timing is dead. Mark Hulbert joins Markets Hub.


Anything can happen but these are the facts.

That’s because market timing goes in and out of popularity according to a fairly regular cycle: It is most popular at market bottoms (when advisers confidently pronounce that “buy-and-hold is dead”) and least popular at market tops (when buy-and-hold makes a big comeback).

Now that the Dow Jones Industrial Average DJIA -0.25% is well above its 2007 high, and the S&P 500 SPX -0.17% is poised to do so any day, I wouldn’t be surprised to start seeing market timing’s obituaries in coming weeks.

To capture this phenomenon, two decades ago I inaugurated an indicator called the market timing popularity indicator — which measures where advisers are between the extremes of buy-and-hold and market timing. I created it after noticing that every time a bull market would go higher and last longer than almost anyone had expected, more and more erstwhile market timers would begin genuflecting at the altar of buy-and-hold.


What is the market timing popularity cycle telling investors?

That meant that market timing was least popular just as the market was about to decline.

Just the reverse has tended to be the case during major market declines.

In the initial phases of the typical bear market, the recent convert to buying and holding will keep repeating that the best long-term strategy is to shun market timing. But as the bear market’s losses continue to mount, more and more of those latter-day converts find themselves unable to tolerate the pain, and decide that they really believe in market timing after all.

To be sure, it is difficult, if not impossible, to comprehensively and objectively measure the relative popularity of market timing and buying and holding. For that and other reasons, the market timing popularity indicator cannot be used to pinpoint precise market turning points. Applying it is at best an art rather than a science.


That said, the indicator did do a decent job of indicating the end of the last two bear markets.

One week before the bottom of the 2007-2009 bear market—on March 2, 2009, to be exact—I wrote a column on market timing’s newfound popularity in which I concluded that “the final low may be closer than we think.”

In March 2003, I devoted a column to the conversion of a prominent believer in buy-and-hold into a market timer. I wrote that “we’re closer than ever to the final low of the 2000-2003 bear market.” That column appeared on March 11, 2003, the exact day of the successful retest of the market’s bear market low that had been hit the prior October.

The timing of those two columns was lucky, of course. But their success does indicate that there is value to paying attention to whether market timing is in or out of vogue.

What does the market timing popularity cycle say today? My assessment is that though it’s on high alert, it is not currently indicating that a market top is hand. There are still too many advisers trying to predict when the market will peak out; the majority of them are not yet telling us that the sky is the limit.

My hunch is, that at least among the 200+ advisers I monitor, the painful memories of the 2007-2009 bear market remain too fresh for market timing to become as unpopular as it was at the October 2007 market high.

But what happened in 2007 provides us with a good object lesson in why we shouldn’t throw caution to the winds. It was in May of that year that the S&P 500 surpassed its prior bull market high (from March 2000). And though market timing wasn’t then so unpopular as to trigger warnings from the market timing popularity cycle, it would do so just five months hence, when the S&P 500 was just 2.3% higher.

So we should be on our guard.

Also this research:

The Advisors’ Sentiment Report… heralding major market moves since 1963

This survey has been widely adopted by the investment community as a contrarian indicator and is followed closely by the financial media. Since its inception in 1963, our indicator has a consistent record for predicting the major market turning points.

Surveying a broad assembly of respected views
We study over a hundred independent market newsletters and assess each author’s current stance on the market: bullish, bearish or correction. Since we have had just four editors since inception, there has been a consistent approach to determining each advisors stance and his prior viewpoint.

Four decades of data to set our precedent
Our weekly sentiment data runs consistently back to the 1960’s. Current readings are put into context against historic precedents.

When the survey was developed by our founder, AW Cohen, he originally expected that the best time to be long the market was when most advisors were bullish. This proved to be far from the case – a majority of advisors and commentators were almost always wrong at market turning points. Quite simply, professional advisors are just as susceptible to market emotions as individual investors – they become far too greedy at the top of trends and far too fearful near the bottom.

A contrary indicator…but only at extremes
We don’t necessarily take a contrarian view to the newsletter writers in our survey. A large part of the time our sentiment readings remain neutral. We consider the norm to be 45% bulls, 35% bears and 20% neutral. However, we do pay attention to extreme readings in both bulls and bears and also to historically significant runs of more bulls than bears. To summarize, advisors are only wrong when you get too many of them start thinking the same thing.

Applying this research to any stock the probabilities of expectations exceeding bullish sentiment are low and the reverse is true. I take the current mood on Vringo's prospects as extremely negative and I have been in this with a core position since last March. Most people who were in this a while are long gone. The only positive sentiment comes from recent buyers