The Sentimeter continues to show a high degree of bullish optimism. There are lots of bulls, and surprisingly, at this stage of the market cycle, this is actually a good thing -- at least for a while. This is our speculative market dynamic or when it takes bulls to make a bull market. And yes there are a lot of bulls. So embrace it while it lasts!

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.

In the bigger picture, this type of market dynamic is late cycle. Typically, it occurs following a much longer market run and it may precede a rather modest drop. The key to navigating to this market environment is understanding where you are on the playing field.

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