From the desk of Willie Delwiche.
Key takeaway: There are signs of bears beginning to stir. Pessimism on the II and AAII surveys has reached its highest level since Q1 and put/call ratios show investors turning to the options markets for insurance rather than leverage. NASDAQ trading volume continues to unwind after surging to new highs earlier this year. This evidence of growing investor/consumer concern, especially when combined with deteriorating market internals and a disappointing macro backdrop, creates an environment ripe for a sentiment unwind. Whether a full unwind comes to fruition or not, rising pessimism tends to weigh heavy on equities after a period of extreme optimism.
Sentiment Report Chart of the Week: Consumer Concern![](https://media-allstarcharts.s3.amazonaws.com/wp-content/uploads/2021/08/willie08182021.png)
Consumer views unexpectedly turned sour in the first half of August and the University of Michigan Sentiment index dropped to its lowest level in years. If this is evidence that bears are emerging from an extended hibernation, it could add to stock market volatility. From a contrarian perspective, it could be a good time to look for relative market leadership from the consumer services group.