The majority of investors are so worried about the next scary sell-off that they've missed the bulk of the US stock rally since 2009. David Rosenberg, a popular source for the gold bugs, has warned investors about so many impending recessions, stock market sell-off, and rallies in gold, it's a wonder anyone follows him.
Investors remain relatively neutral on stocks despite a strong rally (see sentiment). In other words, this is the market's way of saying there's more room to run as rising prices (momentum) encourages more buying. Smart money always backs away when the majority is overly optimistic. While sentiment levels are widely quote by headlines to generate clicks and traffic, they're probably the most misquote and misinterpretation of all financial statistics.
Headline: Why you should always be ready for a big, scary stock market sell-off
Usually, stocks go up.
But they also come down. And more often than you think.
“The question is only one of timing and magnitude,” writes David Rosenberg, strategist at Gluskin Sheff.
Only once in the last 89 years has the S&P 500 not dropped at least 4.4% from an interim peak, and in 2016 there were four of these occurrences. In 2016, the S&P 500 rose 9.5%.
Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.