US Market at New High as Bearishness Passes 50%

The S&P 500 hit a new all-time high this week, and 390 US stocks are on this week's ATH list. This is even more interesting since the AAII sentiment reading hit a low not seen since 2009. Bull markets end with optimism and euphoria, not extreme bearishness.


The figure below is from the AAII, showing the S&P 500 price performance since 1987 and the AAII bullish percent over the same time. I've highlighted the last four times that the bullish percent fell below 20%. You can see that the last times this happened it was either a major market bottom (2009) or the middle of a bull market (1993 and 2005).

Weinstein's Indicators

Indicator	Status	Bias
Stage Analysis	S&P 500 above MA(30)	Bullish
Advance-Decline	NYAD above MA(30), new high recently	Bullish
Market Momentum	NYAD MA(200) made in a range, but well above zero	Bullish
Highs vs Lows	NYHL positive and above 100 for past 3 months	Bullish
World Markets	VEU is above MA(30).	Bullish
Market Leader	AAPL is below MA(30) and has been major underperformer.	Bearish
Price-to-Dividend	S&P500 dividend yield below 1930-2011 average.	Bearish/ Neutral
Contrary Opinion	AAII sentiment survey is extreme - low bullish percent.	Bullish

Overall, the indicator score continues to be above zero as it has been since October 2012.

"Bull markets are born in pessimism, grow on skepticism, mature on optimism, and die of euphoria." - Sir John Templeton

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