Sentiment certainly feels elevated but are there major red flags? Or still time to ride the equity wave? Price action has been constructive as dips are bought, even with crypto taking a break.
So where do we stand? Let’s look at a few indicators.
The fear and greed index:
That’s not bad at all, barely into greed which doesn’t quite feel right.
Goldman Sachs US Equity Sentiment:
Goldman Sachs US Equity Sentiment
This is the highest since Feb 2018 and there was a two-month washout afterwards from 2872 to 2532, or 12%.
In the Consumer Confidence survey, this chart shows the percentage of respondents who think stocks will be higher in the year ahead.
That looks downright dangerous.
AAII Sentiment Survey
Sentiment fell last week and the next edition is due on Thursday. In any case, it’s not particularly elevated.
The VIX:
The VIX
It’s low but certainly not a ‘complacent’ levels.
Overall, this is a real choose-your-own-adventure. I sympathize with the worries and some of the meme-driven moves are stupid but it’s mostly limited to crypto and I tend to think that’s on its own agenda after a major break following a long-term consolidation.