Investor Sentiment Does not Support Stock Market Crash 2018 Outlook

Investor Sentiment

Investor Sentiment Is Not Trading In The Euphoric Ranges

While, the action has been restricted to the upside, the same cannot be said for sentiment readings. For the past four weeks, the moves have been wild, and this trend appears to be gaining traction.  The number of bulls this week surged to 47%, and the number of neutrals and Bears experienced a sharp drop. Additionally, there was a sharp move in our anxiety gauge. Market Update Nov 2, 2017

Despite, all the tall tales experts like Marc Faber love to tell,  in reference to the coming stock market crash, there is no evidence to support these silly assertions. One of the most important indicators of a market putting in a long-term is investor sentiment.  The Crowd is far from Euphoric so the markets are not going to crash. A correction though is a strong possibility as the markets are extremely overbought.  Hence, if the markets let out some steam don’t panic but view sharp pullbacks as bullish developments as it allows the markets to let out a well-deserved dose of steam.

Investor Sentiment not trading in the Euphoric Ranges Investor Sentiment according to Anxiety Index is not bullish

Investor Sentiment Not supportive of a stock market crash in 2018

The market has not let out a decent dose of steam for some time, but when a market is trading in the overbought ranges, it is generally prudent to wait for the market to let out a decent dose of steam before opening long positions in the major indices. The other option is to establish positions in stocks that are trading in the oversold to extremely oversold rangesMarket Update Nov 2, 2017

That is what we told our subscribers back in November and those views still hold. While the markets are overbought, investor sentiment is trading in the oversold ranges.  Most Investors have not embraced this bull market and until they do, it will not crash. Therefore all strong pullbacks should be viewed through a bullish lens.

Compile a list of stocks you would love to own at a discount. When the market’s pullback jump in and buy them.  Alternatively, you can look for strong stocks that have  pulled back and deploy 50% of your capital into them

Conclusion

Investor sentiment has a long way to travel before it hits the Euphoric zone so don’t listen to the naysayers that love to create a mountain out of a molehill. These charlatans take delight in conning the masses that the markets are ready to crash the moment they start to let out a bit of steam.

As the markets are extremely overbought, investors should not be surprised if they do let out some steam. At this point, it would be better if they did shed a large dose of steam.  Now if this scenario comes to pass, then use it to open up positions in strong companies.

A broken Record repeating the same thing over and over again

Maybe one day he will get it right and hopefully by then his followesrs are not completely broke.

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