Historic Optimism in the Stock Market - What Does it Mean?

By: Elliott Wave International

How do you know when the market is getting ready for a change? This quote from Bob Prechter's best-selling book, Conquer the Crash, looks at investor psychology at extremes in the markets:

The engine of high stock market valuation is widely shared optimism. The greater the degree of the advance that is ending, the greater the optimism at its peak. Optimism also tends to remain strong in the early stages of a bear market.

Today, how optimistic are market participants? Bob dedicated an entire issue of his Elliott Wave Theorist market letter to looking at the level of optimism in the markets today. These two charts, excerpted from that letter, show just a piece of the story. Learn how you can get the entire issue, with 15 eye-opening charts, for free.

"Charts tell the truth. Let's look at some charts ...

"Figure 9 shows that in the second-to-last week of October, the public poured more money into various U.S. stock funds than at any time in at least seven years, which includes the 2007 stock market top.

"All this stock buying has created a lopsided investment ratio among fund sectors. As shown in Figure 10, the percentage of money in Rydex's conservative money-market funds as opposed to speculative stock market funds is the lowest since 2001, which is just after the all-time high in the real value for stocks."

These are just two of the 15 charts that you can see for free. For a limited time, Elliott Wave International is giving away a full issue of Robert Prechter's Elliott Wave Theorist. In this 10-page issue, you can see all 15 charts and decide for yourself whether the market is at an optimistic extreme. See below for more details.

See All 15 Charts from Bob Prechter's 10-Page Market Letter -- FREE Is the U.S. stock market at an optimistic extreme? See for yourself with this limited-time special offer.

Download your free copy of Bob Prechter's November Elliott Wave Theorist now >>

4 thoughts on “Historic Optimism in the Stock Market - What Does it Mean?

  1. Every day there is a new piece of evidence on the
    charts. the trend is up,down,bottoming or topping.
    That is all there is IMO. I stopped trying to reason
    what i hoped would happen. What is happening
    today is all that is important. Carol

  2. Yes, I've observed the same thing. Could it be, Prechter makes a living off of creating fear? If we fear something big, bad and beyond our control, we will pay to be protected with "education" or "insights".

  3. .......................even a broken clock is right twice a day....Prechter has been a Bear for many years and missed all of the 2013 Bull Market

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