DBD Strategy Daily - Record optimism is normal in a bubble
The Consensus for US Equities has reached a record optimism since 2010 according to the American Association of Individual Investors. When looking carefully back in time, such a record has never been a sell signal. Moderate highs have been, but extreme highs have not. The Call/Put ratio on the S&P500 is not particularly low given the level of prices. It is not possible to say that this January starts with a complacent US situation. The complacency can be found in Europe, as showed yesterday. Measures on the Eurostoxx 50 are showing optimist investors. But on the FTSE MIB investors are very pessimistic. It is surprising to witness such disparity. We have to chose to ignore the Eurostoxx 50 situation for th time being. It is too unusual.
DayByDay is an independent research company providing global macro and single stock analysis, recommendation and allocation based purely on behavioural finance methods. Those include long term cycle analysis, sentiment analysis, and technical trigger. DayByDay serves all clients in need of practical and precise publications to make effective market decisions, on any time horizon, from a few hours to a few years.
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