According to data captured in Charles Schwab’s most recent Trading Services Sentiment Survey, only 10 percent of traders say they have a bearish outlook for the next three to six months – the lowest level seen since the survey’s inception in February 2008, and a notable drop from September 2013 when 15 percent of traders surveyed had a negative short-term outlook.
While the vast majority of traders (90 percent) have a bullish or neutral near-term market outlook, only 23 percent of traders surveyed say they have changed their portfolio allocation to include less cash in the past three months – while one in three indicate they have increased their cash allocation. And, just 10 percent of respondents report being very confident that their portfolios are properly hedged against risk.
“While general outlook is more positive than we’ve seen in the past, we haven’t seen bullish sentiment translate into changes in trading behavior yet,” said Kelli Keough, Senior Vice President of Trading Services at Charles Schwab. “The survey results reflect what we’re hearing from our Trading Services clients – some say they feel the markets are overvalued, so they’re sitting on cash awaiting a pullback.”
Sector OutlookTwo in five traders (37 percent) indicate they are most bullish on the technology sector heading into 2014 while nearly 20 percent express the most confidence in the healthcare sector. Conversely, nearly a quarter of those surveyed (24 percent) say they are most bearish on utilities. The following is a breakout of the top three sectors on which traders indicate they are most bullish and bearish:
|Most Bullish||Percentage||Most Bearish||Percentage|
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts