After touching the record levels only two weeks ago, currently the market is hopelessly struggling just to find a direction.
According to several investors’ opinion the forthcoming sessions are not looking any better. However, the investors seem to remain more focuses on how soon the short term lending rates are going to rise.
Individual investors at the moment don’t seem to have any significant proclivity to either sell or buy. Almost all the investors polled by the American Association of Individual Investors have started to remain neutral on the issue. This however, adds more uncertainty on where the stocks are headed.
According to the recent survey by the AAI, it seems that 48 percent of the investors are having neutral outlooks over the next six months while another 27 percent seem to be rather optimistic and the remaining 25 percent were flat out negative.
For more than 5 weeks now, the optimistic fraction has remained below the 30 percent mark which is the longest since 2003. For the neutral portion, surprisingly it has exceeded 45 percent over the past nine weeks.
In the mid April the over debt margin rose to a record shattering $507 billion.
The chief Investment Officer at BNY Mellon Wealth Management in New York Leo Grohowski said that there is complacency and he is not fine with it, to say the least, since it marks him anxious.
He added that market participants were not all prepared to deal with higher levels of margin debt. Unpredictability could set out more aggressive sell offs, but a sell off is necessary always initiated by high margin debt levels.
According to Leo Grohowski, a slight prickle in market instability could hamper the overall sentiment of the market in the blink of an eye, and high margin levels can potentially amplify solution. The market has remained within a trading range for several weeks now and some quarters seem to be genuinely worried that a mild rapture could turn out to be brutal.