Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Amazing what the turn of the year and a multi week rally can do for psychology. AAII Bulls have jumped to the highest level in nearly a year, and Bears to the lowest in over a year. While good for contrarians these levels can subsist for a while, they are not very precise. I will also note looking at individual stocks, quite a bit of speculation has returned to the market the past few days in more riskier assets after no life there for months. The “decoupling” thesis of early 2008 is alive and well now, as Europe is ‘contained’ due to the LTRO (or at least can be ignored …. until it can’t), and a lot of ‘growthy’ stocks have finally begun to move. Too early to say it is a trend but it is something to note.
Volatility measures are being flattened, but still U.S. Treasuries continue to be bid strongly – a fly in the ointment.
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