Bull/Bear Ratio Remains Under 1.0

The Bull/Bear Ratio (BBR) remains bearish. It has been bouncing around 1.00 since late February. During the bull market from March 9, 2009 through January 3, 2022, a reading of 1.00 or less turned out to be a very good short-term and long-term buy signal from a contrarian perspective. That’s when investors could count on the Fed Put to save the day.

That’s no longer the case because the Fed currently is occupied by fighting inflation. That explains why the BBR hasn’t worked as a short-term buy signal. However, its current string of bearish readings nonetheless may be signaling that now is a good buying opportunity for long-term investors. But that doesn’t mean that stocks won’t get cheaper in the short run, as happened during the previous two bear markets. Here are the latest stats:

(1) The BBR was below 1.00 this week for the seventh successive week—slipping for the second week, to 0.69, after climbing the prior two weeks from 0.65 (the lowest since mid-February 2016) to 0.93 over the period.