Many Bulls Seem Unhappy With the Rally

 | Oct 11, 2017 | 10:47 AM EDT
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The indices are mixed and breadth is running about even, but semi-serious jokes about how this market will never go down again are very active.

Sentiment polls are showing extreme levels of bullishness, and there are some news records for both lopsided action and suppressed volatility.

What is confusing about this market is how there is such extreme positive sentiment, but no real excitement or euphoria. In fact, many of the bulls seem downright unhappy about how the market won't stop going up.

What the sentiment polls don't reflect is how much money the bulls have at work. That is the real key to understanding sentiment. When everyone is very bullish and heavily long, then there is potential for sentiment to be a contrary indicator.

That doesn't work in this market, because the bulls are constantly struggling to put money to work. They are never able to stay in front of the market action, because it is just too lopsided.

Back in 2000, I suspect there were substantially more bulls that were fully invested and on margin. In the current market, I know many traders that tend to have a very bullish bias, but they aren't even fully invested.

Until the level of investment catches up with the level of sentiment, the likelihood is that this trend continues higher.

A number of stocks that I mentioned yesterday such as Nutanix (NTNX) and Ichor Holdings (ICHR) continue higher. I added new buys of Overstock (OSTK) , Voyager Therapeutics (VYGR) and Phoenix New Media (FENG) .

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