Is There Enough Fear Yet To Trigger a Rally?

Fear is back, as evidenced by a big jump in the stock market’s equity put/call volume ratio on Friday. The Investors Intelligence Bull-Bear Ratio was back under 1.00 during the April 19 week. During the April 20 week, the AAII Sentiment Survey found that bullish sentiment (i.e., expectations that stock prices will rise over the next six months) increased by 3.0ppts to 18.9%. This is the first time that optimism has been below 20% on consecutive weeks since May 18 and 25, 2016. This week’s reading is also just the 33rd time in the history of the survey that bullish sentiment has been below 20%. (The survey was started in 1987.)