The US Investor Sentiment survey shows individual investors are the most negative about the direction of the stock market they’ve been the past five years.
In fact, the last time investors were this bearish was over seven years ago, in January 2013.
I remember 2013 started off with great pessimism, but end up a stunner.
There was a lot going on in the news in 2012 going in to 2013, so investor sentiment reflected it. Then, there was the stock indexes finally reaching their late 2007 highs after a crushing -56% bear market. It took over five years to recover, but it finally did by the end of 2013.
This time may be different.
The individual investors survey for the sentiment gauge may be right.
But more often than not, when their sentiment reaches an extreme, the market proves them wrong.
Anything is possible. Every new trend is unique. The Fed and US Treasury have made it clear they’ll do anything necessary, so those of us moving around big money probably do so knowing the Fed Put is there.
The Fear & Greed Index is diverging from the sentiment poll. The Fear & Greed Index looks at seven different indicators to gauge investor sentiment. Only one of them is positive right now and the level is at mid field.
US Bullish investor sentiment is at an extreme level, too.
The Bull Bear Spread is about as low as it has ever been.
The market climbs a wall of worry, and that’s exactly what it’s been doing.
Mike Shell is the Founder and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of ASYMMETRY® Global Tactical. Mike Shell and Shell Capital Management, LLC is a registered investment advisor focused on asymmetric risk-reward and absolute return strategies and provides investment advice and portfolio management only to clients with a signed and executed investment management agreement. The observations shared on this website are for general information only and should not be construed as advice to buy or sell any security. Securities reflected are not intended to represent any client holdings or any recommendations made by the firm. Any opinions expressed may change as subsequent conditions change. Do not make any investment decisions based on such information as it is subject to change. Investing involves risk, including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. All information and data are deemed reliable but is not guaranteed and should be independently verified. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. The views and opinions expressed in ASYMMETRY® Observations are those of the authors and do not necessarily reflect a position of Shell Capital Management, LLC. The use of this website is subject to its terms and conditions.