Judging from Wednesday's 312-point drop in the Dow Jones Industrial Average, the equity market could be replacing the bond market as the new "vigilantes" who try to drive some sense into Washington, says Schwab's chief investment strategist Liz Ann Sonders.
The sentiment signals are starting to stack up against the bulls . Last week Mark Hulbert at MarketWatch reported that Advisory bullishness was “dangerously high”. He reports that bullishness hasn’t been this high since before the 2007 market highs: “Based on the several hundred investment advisers I track, I’d have to say that bullish sentiment is approaching dangerously high levels. Consider the Hulbert Stock Newsletter Sentiment Index (HSNSI), which represents the average recommended stock market exposure among a subset of short term stock market timers tracked by the Hulbert Financial Digest