The Bulls are clearly in control on Wall Street, but the US stock market sentiment data picture is confusing for many participants now, as there is lots of professional of pessimism about current stock pricing Vs retail optimism. It is a tug-of-war scenario.
This shows up in the high cash levels in managed portfolios, the large money market fund exposure level, and extreme Bear readings in the American Association of Individual Investors (AAII) weekly survey of active non-professional investors.
But, at the same time, there is a lot of speculation. It is showing up in the spiking number of ‘Robinhood accounts‘, and huge all Call buying in retail sector options data.
Those 2 sides make up an unusual market situation. Though is matches with my analysis above. The fundamental skepticism, the momentum, and the China Virus chaos.
This is a Big volatile market, as the Robinhood traders pile into inverse ETFs, mega cap tech stocks and idolicial progressive penny stocks. Wild, Yes!
Underneath it all there is the Big Qs about a good China Virus outcome and Great economic outcomes because the Big Money managers are very underexposed to stocks, and are keeping the pressure on the retail action for the time being, and the strong move off of the 23 March lows consolidate.
Notes: Gold broke out on 22 June and is just 150 off it’s all time highs. The China Virus is an old story and is kept alive by the fearmongers, it is being contained, tune out the Noise. The VIX has not spiked. Friday marked the reconstitution of the FTSE Russell indexes, including the large-cap Russell 1000 and small-cap Russell 2000.
Friday, the major US stock market indexes finished at: DJIA -730.05 to 25015.57, NAS Comp -259.78 to 9757.23, S&P 500 -74.71 to 3008.92
Volume: Trade on the NYSE came in at 3.2-B/shares exchanged
- NAS Comp +8.7% YTD
- S&P 500 -6.9% YTD
- DJIA -12.3% YTD
- Russell 2000 -17.4% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Neutral/Bullish with a Very Bullish bias for the week ended 26 June 2020.
Looking Ahead: Investors will receive the Pending Home Sales report for May Monday
Have a healthy weekend, Keep the Faith!