We use sentiment to help put the behavior of the stock market into context.
When looking at markets, it's easy to see what stocks are doing. All you have to do is look.
But what are people thinking? That's what we want to know.
When everyone is bullish, it's hard for stocks to go up in price at the same rate. When everyone turns bearish, that's historically a great time to be putting money to work.
Coming into August, sentiment was running hot. The VIX was at 10, the put/call ratio was muted, newsletter writers were giving us some of their most bullish readings of all-time, and our sentiment composite was as complacent as it's ever been.
Boy did that change quickly.
We just saw the largest week over week spike in bears among individual investors since 2022, just as this bull market was getting started.
Remember, over the short- to intermediate-term, stock prices don't move based on the fundamentals. They move up and down based on positioning, or in many cases, a lack of positioning.
When no one wanted Tech and mega-cap growth at the end of 2022, that was when Tech and mega-cap growth really got going.
Before that, when everyone wanted high growth Tech, Cathy Wood was the next Warren Buffett, and that's when Tech stopped working for a while - and is still not working in many of cases.
Last week, we held our April Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
