A big concern for stocks this summer was that there weren’t any bears left.
Most of the silly permabears had given up and moved on to torture investors in other asset classes like Bitcoin or Gold.
Sentiment this summer was a headwind.
And now it’s the opposite. Sentiment is a tailwind for stocks.
Take a look at the sentiment from Financial Advisors and Individual investors. Just a few months back, we saw the most amount of bulls since January 2018, just before stocks all over the world plummeted.
All it took was half the nasdaq stocks dropping 20% for sentiment to mean revert. Take a look at this chart showing that we’re down to levels where bulls historically start showing up, and that’s usually because of an increase in stock prices: [Read more…]