A snapshot of the latest data courtesy of Sentimentrader.com shows that Dumb Money had recently gotten the willies big time, while Smart Money firmed up. Then a post-FOMC feel good fest unsurprisingly whipped up. This has not yet brought the short-term sentiment indicators back to a contrarian bearish stance.
Short-term, Dumb Money got spooked and has been rebounding a bit with the markets, while Smart Money does the opposite. This is not a bearish configuration.
Long-term is a different story as Dumb Money has been trending higher with the markets throughout the post-2008 cycle. So there is a supportive short-term condition for the market but an ongoing long-term bearish one.
Here is the aggregate of various sentiment indicators. The red box shows what a really bearish setup looks like. Still nowhere near that.
Sentiment indicators like all others, need to be considered as part of an overall view. They are conditions, not directors.
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