If investors are climbing a "wall of worry," where's the evidence?

The stock market's recent rally has seemed to ignore Europe's debt crisis and the weak U.S. economy, and in turn commentators have dusted off an old Wall Street phrase: wall of worry.

• Why Stocks are Climbing the Wall of Worry -- Equities.com, Aug. 10
• Global stocks have been rallying in recent weeks, climbing a "wall of worry" -- CNBC, Aug. 8
• We do this thing on Wall Street called climbing the wall of worry. -- ABC News, Aug. 7
• Stocks scale wall of worry -- Marketwatch, July 19

That's just a small sample of recent "wall of worry" quotes.

However, one reliable indicator of trader sentiment tells a different story: that traders have few if any worries about a big market plunge.

In fact, the sentiment among traders has been bullish, as noted by the Aug. 10 Financial Forecast Short Term Update [wave labels removed from the chart].

[The chart below] plots the 5-day closing CBOE Equity put/call ratio, which declined to .60 at yesterday's [Aug. 9] close. That was the lowest close since May 1 (.58)...This measure shows a greatly diminished amount of put volume relative to call volume, indicating that traders feel complacent toward the need to hedge against a major decline in stocks.

Trader sentiment is one of the pillars of market analysis and forecasting -- two other such pillars are wave structure and momentum.

All three pillars now send the same market message.

Do not expect commentators to discuss these pillars. The crowd is almost always on the wrong side of the market. Start looking at investment opportunities independently and learn to use wave analysis.

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This article was syndicated by Elliott Wave International and was originally published under the headline Sentiment Measure Shows No Fear of Major U.S. Stock Decline. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.