Key Takeaway: It appears the bulls are preparing to pack it up and call it a day. Dark clouds are starting to roll in, as the slow deterioration beneath the surface has taken its toll. New highs and a relentless rally in the major indexes paint an alternate reality versus the experience of the average stock--a reality that hasn’t quite sparked the interest of the bears so much as it’s exhausted the bulls. Active investment managers continue to taper their exposure, and advisory services have turned their least bullish in more than a year. A storm is brewing in the form of a re-set in sentiment. As it inches closer, the question becomes more of “when” and “how,” not “if.”
Sentiment Report Chart of the Week: New lows in new highs
Indexes are making new highs, but beneath the surface the case for more caution on the part of investors makes more sense. There are many ways to describe the deterioration that’s been ongoing for months now. Here’s one more: For only the second time in the past two decades, the S&P 500 Index made a new high while more stocks on the NYSE+NASDAQ have been making new lows.
