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.
