– Investor psychology becomes even more constructive for stock market gains on investment survey readings.
– AAII survey is approaching 2008 bearish extremes, but equity allocations remained overweight equities in May.
– An unusual Consumer Confidence combination – late cycle expectations, bullish on rates, bearish on stocks.
Archive
Market Outlook – Psychology Composite improves to the Bullish side of Neutral
– Market Risk Index readings are growing more neutral for stocks, on improvements to investor psychology.
– Valuation improvements have driven return expectations for stocks higher by more than 400 basis points but still fall short of 10Yr Treasury Yields.
Market Outlook – Sharp drop in MRI
– Psychology composite gives bear market rally vibes, but classic signs of capitulation are still out of reach.
Market Outlook – Is it over?
– Daily Psychology Composite point totals are the best since Feb 2020.
– Conditions are ripe for a bear market rally more than a bull market.
– A dramatic week, but none of the ingredients for a Powell pivot.
%
Market Risk Index
Market Risk Index scales from 0 to 100%. Higher readings correspond with higher risk markets. Scores below 25% are bullish. Scores between 25-75% are neutral, and scores above 75% are markets vulnerable to major drawdowns.
Model Category Readings (Percentiles)
- Psychology 99.7%
- Monetary 87.2%
- Valuation 99.3%
- Market Trend 9.8%