While it is early in the decline, you can plainly see by the blue line that there is still a very large amount of call buying going on and that translates into investors thinking stocks will not go down.
Complacency like this can be very dangerous and while it does not send an all out sell signal on stocks, it does wave a red flag.
I will keep a close eye on this as well as the sentiment polls that are also showing most investors bullish. More so than in 2004!!
So, while these are negatives, we still have the smart institutional money on our side and until that trend reverses course I must remain in a long term bullish allocation.
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