Most investors now expect the U.S. stock market to crash like it did in October 1987 — why that’s good news

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Investor sentiment is a contrarian indicator, writes Mark Hulbert. So all this pessimism may be good news: (OPINION)

Individual investors have never been more worried about a U.S. stock market crash. That’s great news. This counterintuitive reaction is because investor sentiment is a contrarian indicator. So it would be more worrying if investors thought there was a low probability of a crash.

“What do you think is the probability of a catastrophic stock market crash in the U. S., like that of October 28, 1929 or October 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.? ” A close examination of this chart also shows why a contrarian interpretation of the CCI may be warranted. Notice that the other occasion on which it got as low as it is today was the spring of 2009. That coincided with the bottom of the financial crisis-induced bear market —a great time to invest in the stock market.

Open to interpretation My analysis of the CCI is not the only way to interpret it. In a recent opinion article in the New York Times, Shiller pointed out a big difference between now and the situation that prevailed in the spring of 2009: then the stock market was far less overvalued than it is today, as judged by the Cyclically-Adjusted Price Earnings ratio — if not outright undervalued.

 

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jimcramer There's a new monetary system that will become within 10 years. Look at the Club of Rome agenda and United Nations websites. NWO objectives

Pulling out this week, for sure.

Also, Einhorn bottom? Like Aikman bottom in March🤪?

Seams people are worried about a crash every day. Nothing new here. Move along.

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