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I want to go ahead and share an insight from the May Elliott Wave Financial Forecast, which is part of this event, and it’s related to bullish sentiment. Here’s a chart and commentary:

Every month since July 1987, The Conference Board Consumer Confidence survey asked respondents if they expect stock prices to rise, stay the same or go down over the next year. In March, 49.7% expected an increase. The only higher reading in the 37 years of the survey came in January 2018 at 51%, which coincided with the end of a third wave rally in the S&P, which was followed by 26 months of wild swings but net decline.
These recent headlines also reflect a strong bullish sentiment:
- The stock market’s sell-off is over and the Fed gave 5 bullish signs to investors … (Yahoo! Finance, May 2)
- The Stock Market Will Rise Nearly 10% More This Year, Money Managers Predict in Barron’s Latest Poll (Barron’s, May 3)
Yet, it’s not just professional money managers who are bullish. Retail investors have been jumping into the market with both feet – even after the early spring decline in stock prices.
Indeed, on April 23, Main Street investors jumped to a record total net long value of $68 billion, a 62% increase from the September 2021 extreme near the last major peak.
And history shows that retail investors have generally been on the wrong side of the market at major turns. So, the current bullish obsession with the stock market may be a sign that another round of rocky trading action may be ahead. April was already a disappointing month. And now, “Sell in May and go away” is here. Or is it “different this time”?
Besides sentiment gauges, the May Elliott Wave Financial Forecast is also focused on the price pattern of the stock market.
You can get our detailed Elliott wave analysis of the Dow Industrials and Russell 2000 (as well as our analysis of bonds, gold, silver, the U.S. Dollar and more) by participating in our Financial Forecast Service Test Drive event. Learn how you can get instant access to our flagship analysis by following the link below.
Investors Are Obsessed with the Stock Market. Time to Buy? (Video)
Here’s the message of the Conference Board Consumer Confidence survey
The stock market’s decline this spring did not faze many Main Street investors. Indeed, instead of getting nervous, they bought. Here’s what you need to know about retail investors at major market turns.