Chart of the Day - Friday, March 8, 2024

🏆 Today’s Chart of the Day was shared by David Keller (@DKellerCMT).

• Investors feel much more optimistic now than at the end of October, thanks to a +24.4% rally in the S&P 500.

• According to the AAII Sentiment Survey, the percentage of bulls has doubled from 23.4% at the end of October to 51.7% this week.

• David points out that this is the 11th time bulls have exceeded 50% since the 2009 low. Three of them have occurred in the past year! Only 2 of the 11 were significant tops, while the other 9 occurred mid-cycle.

The takeaway: Sentiment matters at extremes, but it’s more of a condition than a signal. Humphrey B. Neill once said it best – “The public is often right during the trends, but wrong at both ends.”