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. Continue reading "Historic Optimism in the Stock Market - What Does it Mean?"