From Dow Jones & Company, Inc.:



The stock market’s rally has lost almost all support from contrarian analysis. Short-term stock market timers are more bullish today than almost anytime since 2000, with their average recommended equity exposure level currently higher than in just 0.7% of the trading days since 2000. The Hulbert Stock Newsletter Sentiment Index (HSNSI) shows that the market-timers’ average recommended equity exposure level is in the top 10% of their distribution since 2000, indicating excessive optimism.

The HSNSI entered the top decile zone more than a month ago and, contrary to contrarians’ expectations, the stock market continued to rise. However, the HNNSI, reflecting Nasdaq-focused timers’ average recommended equity exposure, has also moved into its zone of excessive optimism, indicating deteriorating sentiment. This picture doesn’t guarantee an immediate market stumble but suggests that the U.S. market’s rally is living on borrowed time.

The HNNSI, reflecting on Nasdaq-focused timers’ average recommended equity exposure, shows that the market-timers who focus on the Nasdaq market are much less optimistic, however, data suggests that the U.S. market’s rally is increasingly living on borrowed time.



Read more: This record-setting stock market rally is living on borrowed time