Is the Stock Market Ripe for a Crash? – Wall St. Cheat Sheet

Bespoke Investment Group

With the stock market hitting all-time highs on a daily basis, optimism does not appear to be slowing down. All three major indices reached new milestones this year and crushed any bear that stood in the way. However, the large crowd of bulls may give some investors reason for concern.

Bears appear to be in full hibernation mode. According to the latest AAII Investor Sentiment Survey, for the week ended December 18, only 25.1 percent of individual investors are bearish on the stock market for the next six months. In fact, the amount of bearish sentiment has been below its long-term average of 30.5 percent for ten consecutive weeks — the longest streak since early 2012.

On the other side of trading screens, a whopping 47.5 percent of individual investors are bullish on the stock market. This is the ninth time in the past 11 weeks that optimism came in above 40 percent. The historical average is only 39 percent. Meanwhile, 27.5 percent of investors are neutral on the stock market, three percentage points below its long-term average.

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Is the Stock Market Ripe for a Crash? – Wall St. Cheat Sheet

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