Great Recession 2

Consider the following from Elliott Wave International:

Many other groups also feel exceptionally bullish. The latest Elliott Wave Theorist reports that a "bullish consensus" has also crystallized among a wide range of investors and financial professionals:

"Individual investors (AAII poll)—most bullish in six years
Newsletter advisors (I.I. poll 20-week average)—most bullish in seven years
Futures traders ( poll)—most bullish in four years
Mutual fund managers (% cash)—most bullish ever
Hedge fund managers (BoAML survey)—most bullish ever
Economists (news-org polls)—unanimously bullish
Top global strategists (three national year-ahead panels)—unanimously bullish
Even most 'bears' on the economy are bullish on stocks because of inflation!"

Patterns of investor psychology are not new. In fact, they repeat themselves. Consider this quote in 1960 from Richard Russell of Dow Theory Today:

"Psychology during bear market rallies seems to follow a fairly consistent pattern. 'During secondary reactions [upward] in bear markets,' wrote [Robert] Rhea, 'it is a fairly uniform experience for traders and market experts to become very bullish.'"

Those words are as true today as they were 50 years ago.

We can see by the RSI, MACD, SMAs and Stochastics that the S&P is rolling over.

How long until the bullish sentiment turns into a rush for the exits?

Consider the inventory of base metals as the charts show above.

How long can commodity prices remain high when inventories are at such high levels?

In my view, loose monetary policy is causing hot money to flow into commodities as a "store of value". If so, once there is a slight change in interest rates or bond yields, many commodity prices could simply collapse.

Does anyone have a different explanation?