Two weeks ago, I wrote about how the sentiment indicators had become stagnant
. Here we are two weeks later and little has changed with the indicators, but the market has seen a tremendous increase in volatility.
The AAII Sentiment Survey bull-to-bear ratio did increase from 1.09 to 1.28 in the last two weeks, but the four-week moving average has dropped from 1.39 to 1.28. This tells us that investors are more concerned, but not at an alarming level.
Two weeks ago I wrote about how the 21-day moving average on the CBOE Equity Put/Call ratio had seen all readings since Feb. 5 come in between 0.577 and 0.603. On April 7, the moving average jumped all the way to 0.605 before settling back into the range.
The CBOE Volatility Index (VIX) is the one indicator that jumped during the last week as it reached as high as 17.85 and has closed the last two days above the 16 level that had contained the top side of closing levels for the last few months.
The concerning part is that the indicators have remained at these levels, while the S&P 500 had its worst week since last June and the Nasdaq had its worst one-day loss since November 2012 last Thursday.
At this point I'm not sure what it is going to take to see some substantial movement in the sentiment indicators. Investors seem content to buy the dips and try to ride this bull market just like they did in the late 1990s.
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