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Investor Sentiment Signaling Stock Market on Thin Ice

Investor Sentiment Signaling Stock Market on Thin Ice.  The SentimentTrader Smart Money/Dumb Monday Confidence Spread has hit  a ten-year low (see chart), signaling a growing gap between how smart and dumb investors view the future of the stock market..

Investor Sentiment Signaling Stock Market on Thin Ice
Investor Sentiment Signaling Stock Market on Thin Ice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The  smart money is becoming increasingly pessimistic about stocks rallying in the weeks and months ahead while the dumb money is becoming  increasingly optimistic that they will.. That is a clear warning sign that stock investors should be very cautious. Another sign of caution comes from the equity put/call ratio (detrended), which looks at the ratio’s 10-day average relative to its 26-week average. The ratio is now at its lowest level since January 2018. Stocks tanked and the VIX spike the last time this ratio was this low (see  chart)..

Investor Sentiment Signaling Stock Market on Thin Ice
Investor Sentiment Signaling Stock Market on Thin Ice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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