Experts say that investor sentiment is at historically high levels of optimism, despite fragile economy. Which is interesting, because this is similar to the sentiment in May 2008 right before the market collapsed 40%. If you look at S&P 500 Crash Count conducted by Mike “Mish” Shedlock in October 2008. The waves seem to indicate a double dip if waves 4 and 5 hold true.
Here are some excepts from Robert Prechter:
Despite ten years of weak prices, the Elliott wave model and major-trend measures of sentiment (low dividend yield, low mutual fund cash holdings, etc.) still indicate historically high levels of optimism
Social mood is down from the record-setting optimism recorded in 2000 and 2006 to 2007, but it is still high
Most people think that society is worried, but it’s not. It only seems that way because people are using the greatest extreme in optimism in 300 years as a benchmark.
Robert Prechter – Elliott Wave International
“Elliot Wave examines how “Parade of Optimistic Expert Assessments” Persist”
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