From David Rosenberg’s morning note:
The share of households who are bullish on equities rose to 35.8% from 31.7% in April and the March low of 19.6% (this is the highest since July 2001). The ‘bear share’ fell to 30.8% from 35.7% (was 52.8% at the March market lows) — the lowest the bear share has been since October 2007. Could be the hidden ‘contrary’ negative data-point in a report that is being viewed as widespread bullish for equities.
THE LAST TIME THAT THERE WERE MORE EQUITY MARKET BULLS (35.8%) THAN BEARS (30.8%) WAS BACK IN OCTOBER OF 2007 WHEN THE MARKET WAS HITTING ITS PEAK. THIS METRIC WORKS LIKE A CHARM BECAUSE LAST MARCH, AT THE MARKET LOWS, THE GAP BETWEEN THE BEARS (52.8%) AND THE BULLS (19.6%) IN THE OTHER DIRECTION WAS THE LARGEST SPREAD SINCE JULY 2008 (AND THE SECOND LARGEST GAP ON RECORD).