Equity market investor sentiment has turned extremely optimistic. See the Equity Market Investor Sentimeter below, which is our most comprehensive sentiment indicator. This indicator is constructed from 10 different data series including opinion data (i.e., how do you feel about the market?) as well as money flow data (i.e., where is the money going?). This is the current state of equity market investor sentiment.

This past week the indicator turned "extremely optimistic" from just "optimistic" as investors continue to push the market higher. In essence, the "dumb money" has become extremely bullish and the "smart money" (i.e., corporate insiders) has become extremely bearish. While many would interpret these findings as a bear signal, we believe that such optimism is indicative of a highly speculative market environment. It is late in the rally for sure, but it takes "bulls to make a bull market", and this is all we are seeing. Meaningful short term gains can be had in these circumstances.