"I have mentioned several times recently that bullish sentiment is extreme. Bullish Sentiment: Turning into a Stampede? If anything, "extreme" seems like an understatement as noted in
The latest Elliott Wave Theorist reports that a "bullish consensus" has also crystallized among a wide range of investors and financial professionals:
· "Individual investors (AAII poll)—most bullish in six years
· Newsletter advisors (II poll 20-week average)—most bullish in seven years
· Futures traders (trade-futures.com poll)—most bullish in four years
· Mutual fund managers (% cash)—most bullish ever
· Hedge fund managers (BoAML survey)—most bullish ever
· Economists (news-org polls)—unanimously bullish
· Top global strategists (three national year-ahead panels)—unanimously bullish
· Even most 'bears' on the economy are bullish on stocks because of inflation!"
Patterns of investor psychology are not new. In fact, they repeat themselves. Consider this quote in 1960 from Richard Russell of Dow Theory Today:
"Psychology during bear market rallies seems to follow a fairly consistent pattern. 'During secondary reactions [upward] in bear markets,' wrote [Robert] Rhea, 'it is a fairly uniform experience for traders and market experts to become very bullish.'"
Those words are as true today as they were 50 years ago..."
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