This is the greatest bull market in complacency
By John Mauldin
Investors are ignoring what may be the biggest policy error in history -- 'QT'
My good friend Peter Boockvar recently shared a chart with me.
The University of Michigan's Surveys of Consumers have been tracking consumers and their expectations about the direction of the stock market over the next year.
We are now at an all-time high in the expectation that the stock market will go up.
It is simply mind-boggling to couple that chart with the chart of the VIX shorts (I wrote about the VIX craze in this issue (http://www.mauldineconomics.com/go/v37rdv/mkw) of Thoughts from the Frontline (http://www.mauldineconomics.com/go/v37rdz/mkw)).
"Bullish stock market sentiment has gotten extreme again, according to Investors Intelligence. Bulls rose 2.9 pts to 60.4 after being below 50 one month ago. Bears sunk to just 15.1 from 17 last week. That's the least amount since May 2015. The spread between the two is the most since March, and II said, "The bull count re-enters the 'danger zone' at 60% and higher. That calls for defensive measures." What we've seen this year the last few times bulls got to 60+ was a period of stall and consolidation. When the bull/bear spread last peaked in March, stocks chopped around for 2 months. Stocks then resumed its rally when bulls got back around 50. Expect another repeat."