The Retail Investors are scared to death. And that's a good thing.
We don't want individual investors too optimistic. That's when stocks sell off. It's when they're pessimistic and worried that you see the best forward returns.
Go back and see for yourself. It's all public information. These are the people we want to fade. This is the "Dumb" money, so to speak.
Dig this. The first sentiment data for the year just came out from the American Association of Individual Investors with the fewest number of bulls since April of last year.
In the middle of the bull market, they're crazy scared.
Good.
Now keep in mind, this is specifically what they're saying.
But what are they doing?
Well, the Put/Call Ratio just hit new 4-month highs. This means investors are buying insurance (Put options) at a much faster rate than they're betting on higher stock prices (Call options).
That's also evidence that they're scared. Why else would you be buying insurance at such a fast rate?
Now, what else are they doing?
Active Investment Managers (NAAIM) have on the least amount of long exposure since last Summer.
Holy crap are all these investors scared...
In the middle of a raging bull market, with the major indexes just a few points from new all-time highs!
Meanwhile, the S&P500 hit new lows yesterday. So did the Nasdaq100.
But the percentage of stocks on the NYSE above their 200 day moving average hit new 2-week highs!
This data above shows how many stocks are in longer-term uptrends, as calculated by the 200 day moving average.
Even though the indexes themselves made new lows, the number of stocks in longer-term uptrends actually increased!
That's the longer-term look. But as it turns out, the number of stocks on the NYSE above their 20 day moving average also made new 2-week highs:
That means the number of stocks on the NYSE in shorter-term uptrends, also increased.
20 days is above a month's time.
Breadth is improving across multiple timeframes just as sentiment is getting too bearish.
What better combination do you want in the middle of a bull market?
If you're new here, I'm preparing for our Big Event on Monday. This is our first LIVE Conference Call of the new year.
It's exclusively for Premium Member of ASC Research.
We're laying out the plan for January and Q1 during this call with very specific trade ideas that are actionable right now.
