From the desk of Willie Delwiche.
Key Takeaway: The bulls are back as more and more investors begin to reach for risk. Optimism is expanding across investor surveys and active equity managers have increased their exposure to levels not seen since the beginning of the year. This fresh bout of risk-seeking behavior comes as both momentum and price trends have turned bullish. Also, participation beneath the surface is expanding as the major indexes reach record highs. Combine this backdrop with a healthy number of stubborn bears and we have an environment that supports the next leg higher.
Sentiment Report Chart of the Week: Appetite For Risk Returns
Investors are not just feeling more optimistic, they are doing something about it. NASDAQ trading volume, which fell by nearly 30% from March to October, has turned higher in recent weeks and is 20% higher than it was this time last year. Equity call option activity has also expanded as investors are stepping back up to the ‘risk on’ buffet after a multi-month fast.
