We started noting the spread between Smart Money and Dumb Money
Confidence over a month ago. And yet it continues to remain
stretched. Saying this is unusual is a major understatement. The
50-day average of the spread is nearing -60% for only the 2nd time
ever. Even though it triggered as sentiment recovered out of the
last two big bear markets, the Backtest Engine shows the S&P
still declined over the next month both times.
If there was any doubt about the persistence of buyers, then
there shouldn’t be after the past few weeks. They’ve shrugged off
worry after worry, and pressed stocks to yet more all-time highs.
Even buyers sometimes fret that maybe things are getting out of
hand. Nobody wants to feel like a fool for buying at the top, and
when we see remarkable price action like this, it starts to worry
even die-hard bulls. Remarkable it has been. For the first time in
more than 20 years, the S&P 500 has moved so much, so fast,
that it has closed above its upper Bollinger Band on a daily,
weekly, and monthly time frame. Not even the biggest momentum moves
of the past two decades can brag about that.
-Sentiment Trader
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We started noting the spread
Posted by ssaffer on 17th of Jan 2020 at 06:24 pm
We started noting the spread between Smart Money and Dumb Money Confidence over a month ago. And yet it continues to remain stretched. Saying this is unusual is a major understatement. The 50-day average of the spread is nearing -60% for only the 2nd time ever. Even though it triggered as sentiment recovered out of the last two big bear markets, the Backtest Engine shows the S&P still declined over the next month both times.
If there was any doubt about the persistence of buyers, then there shouldn’t be after the past few weeks. They’ve shrugged off worry after worry, and pressed stocks to yet more all-time highs. Even buyers sometimes fret that maybe things are getting out of hand. Nobody wants to feel like a fool for buying at the top, and when we see remarkable price action like this, it starts to worry even die-hard bulls. Remarkable it has been. For the first time in more than 20 years, the S&P 500 has moved so much, so fast, that it has closed above its upper Bollinger Band on a daily, weekly, and monthly time frame. Not even the biggest momentum moves of the past two decades can brag about that.
-Sentiment Trader