Consumer Still Doubts Bull Market

Below is the University of Michigan Consumer Sentiment Index overlaid on the S&P 500.  There are many criticisms of the Consumer Sentiment Index and I am aware of all of them but it’s still a very good proxy for overall sentiment and has a long historical history.  We’ve got to work with what we’ve got.

Regardless of what the short-term sentiment indicators say, the public at large is still not bullish on the stock market.  This is classic wall of worry.  Historically, the public is usually invested in the market when the consumer sentiment reads above 85-90.  I doubt that this bull market can conclude without the public getting very bullish on stocks.  This suggests that while there may be a pullback in the near-term, in the long-term there’s still plenty of room for the market to run.

Note: I have drawn the most recent data in red, some of which is still subject to revision.


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