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.

Option Buyer Sentiment Gauge remains at 2009 levels

Option buyer sentiment is at 2009 levels.  Is it too optimistic to expect a rally as significant?

Public Investor Sentiment is Extremely Negative

Public market sentiment is extremely negative.  Fear is currently running higher than it did during the Euro Debt Crisis of 2011.  The difference then was that fear didn't reach similar levels in 2011 until all of the problems with the euro zone became apparent and the S&P 500 had corrected approximately 15-20%.  Fear is higher today with less downside movement in equities.  What's interesting is how negative public sentiment is when compared to investor sentiment.  Investor Intelligence reports somewhat bearish or neutral sentiment while public sentiment has become extremely negative, extremely fast.  This is generally good for the stock market.

(charts courtesy CNN Fear & Greed, Stockcharts.com)