Too Many Happy Bulldogs?

We have nothing to fear but nothing to fear. The Fed is done tightening. The economy is doing fine. Inflation is moderating. The stock market is hitting record highs. So what's wrong with this picture? Nothing other than it is the consensus view, and ours too. Today, there are lots of happy bulls, including us. We would be happier if there were fewer bulls.

Last week, Investors Intelligence Bull/Bear Ratio rose to 3.54, the highest since the start of the current bull market (chart). This week, it edged down to 3.45. In our experience, this ratio works better as a contrarian buy signal when it is below 1.00 than as a contrarian sell signal when it is above 3.50.