Roubini Popularity Index Turns Neutral from Bearish

We at Insider Monkey have shown that Nouriel Roubini’s popularity has been a reliable sentiment indicator for the most part of the past 4 years. The increases in Roubini’s popularity are followed by declines in the stock market and the declines in Roubini’s popularity was a bullish indicator for the stock market.

The Roubini Sentiment Indicator was bearish on August 22^nd. It then turned bullish on September 19^th, and sent a buy signal on October 10^th.  The bullish signal was repeated on October 17^th. Those were both very accurate signals.

Roubini’s popularity increased sharply on October 24^th and October 31^st, indicating a decline in the stock market in November. After the Fed surprised the financial markets with a $600 Billion QE program, Roubini’s popularity went down by 20% and turned neutral. Currently Roubini’s popularity is less than 50% of what it was in May. It’s been around these levels since early July and the stock market has increased considerably. What is not good for Roubini’s popularity is good for the stock market.