Where have all of the AAII bulls gone? Europe and emerging markets apparently...

Despite the S&P500 being only 24 points from all time highs, AAII investor bullish sentiment has reached unusually low levels.  Fund flow data indicates that over the past 2 weeks a lot of money has left US equity ETFs and flowed into developed international and emerging market ETFs.  The Fast Pitch blog indicated recently that fund manager US equity allocation is currently at a 9 year low.

From a contrarian perspective one must view this as positive.  With cash balances of the top companies in the S&P500 at record levels, corporate tax reform on the horizon combined with sound corporate and economic fundamentals, it makes sense to be a buyer of US equities.  I think the majority of investors are being distracted by the negative media and the recent Trump political drama.

Nasdaq 2017 = Dow Jones Industrial Average 1950s? Ultra bull market ahead?

Looking back it wasn't surprising that the US stock market would enter a correction at the Nasdaq 5000 range.  This was the previous year 2000 top (~5200).  Breaking through this level required more conviction on behalf of the market as it signified the Nasdaq was finally leaving the dot.com bubble top behind it.  Market watchers have been focusing on Dow 20000 and S&P500 2400 but I think the Nasdaq is the index to watch.

After the 1929 top, the Dow finally reached new ATHs in the early 1950s AFTER which a 18 year bull market followed until concluding in 1968.  The post 2000 Nasdaq has a very similar chart to the post 1929 Dow.  Some differences being that consolidation in the Nasdaq post 2000 was more constructive and shorter in duration than Dow consolidation during the Great Depression.  From absolute top to bottom the Nasdaq corrected less than the Dow and reached new ATHs sooner.  One can suggest that the modern Nasdaq has shown more resilience than the 1930s Dow.  If the Nasdaq follows a similar pattern of Dow 1950 we can expect a long and powerful bull market ahead.