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Wednesday, November 03, 2021 10:18:29 AM
Investors Are Back in Full Risk On Mode
By: SentimenTrader | November 3, 2021
Investors are back in full risk-on mode.
By early October, stocks had been mired in the longest pullback in over 200 days, finally ending some long momentum streaks, and risk appetite was declining fast. For the first time since the pandemic, the Risk-On/Risk-Off Indicator fell below 50% on consecutive days.
None of those were cause for concern. Historically, buyers have returned quickly after momentum and risk-taking behavior had been so strong, for so long.
Now that stocks have rallied again, investors are back in risk-on mode, in a big way. Speculation in options has ramped up, there is little fear of a November pullback, and almost all core indicators are showing risk-seeking behavior. More than 95% of indicators showed a risk-on attitude by late last week though that's ticked down a tad since then.
A reading of 95% is in the top 7% of all days since the year 2000, and the S&P 500's annualized return is relatively small after such high readings. It shows a bit of overheated sentiment that tends to work itself off with small gains at best in the short-term.
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By: SentimenTrader | November 3, 2021
Investors are back in full risk-on mode.
By early October, stocks had been mired in the longest pullback in over 200 days, finally ending some long momentum streaks, and risk appetite was declining fast. For the first time since the pandemic, the Risk-On/Risk-Off Indicator fell below 50% on consecutive days.
None of those were cause for concern. Historically, buyers have returned quickly after momentum and risk-taking behavior had been so strong, for so long.
Now that stocks have rallied again, investors are back in risk-on mode, in a big way. Speculation in options has ramped up, there is little fear of a November pullback, and almost all core indicators are showing risk-seeking behavior. More than 95% of indicators showed a risk-on attitude by late last week though that's ticked down a tad since then.
A reading of 95% is in the top 7% of all days since the year 2000, and the S&P 500's annualized return is relatively small after such high readings. It shows a bit of overheated sentiment that tends to work itself off with small gains at best in the short-term.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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