Where Have the Bulls Gone?: Ritholtz Chart

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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One of the things that we expect from market tops is an excessive amount of bullishness. However, that is not what we see in the most recent AAII Investor Sentiment Survey.

The chart above from Bank of America Merrill Lynch shows the bulls-to-bears ratio. The ratio is far below the levels that it regularly registers even as the market reaches new highs. In fact, the ratio is close to the lower end of its range.

How we can square this lack of optimism with the warnings about the imminent end of the bull market?

If you care to explain the lack of bullishness, please send me an e-mail (my address is listed below). If I get enough compelling explanations, I will try to address them in another post.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net