Salient to Investors:

Street Authority writes:

  • The AAII survey shows less than 20% of investors are bearish, the lowest reading in 18 months. Stocks tend to rally when the AAII survey finds few bullish investors.
  • Technical indicators including momentum and not fundamental indicators like valuations and growth rates are driving the market.
  • S&P 500 earnings will rise 4% or 5% for the quarter, but a strong dollar and slowing key emerging market economies could compel companies to set a lower bar for the next two quarters.
  • For the third time in 15 years, margin debt has moved above $350 billion. The previous 2 times, 2000 and 2007, the stock market was sharply lower a year later. Margin debt has been above  $350 billion for the whole year.

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