Stock market tops are formed on euphoria and seeing people that have no business in investing making tons of money on Nikola (Nasdaq: NKLA) through call options.
The financial media loves to assign opinions to you, so here is what they’ve assigned to me this Friday:
Don’t panic, but be prepared. An investors’ survival guide for the unstable, uncertain and volatile months ahead
Investors should brace for an extended period of stock market volatility
Attention millennial investors of the pandemic: It’s time to sell your tech stock winners
Sounds like there’s a bit of steam left.
I’m thinking there is a difference in the current bearishness in investor sentiment and the bearishness we saw in March. In March, bearishness seemed to follow the market down (ie. falling market prices generated negativity). Today, we have bearishness at a market peak. Is this a qualitatively different indication? I.e. interpret this to mean of an impending market decline?
Data: https://ycharts.com/indicators/us_investor_sentiment_bearish
and since investor sentiment tends to be a contrary indicator this could actually be viewed as positive sign for markets.