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Randy Frederick, Managing Director Of Trading And Derivatives At The Schwab Center For Financial Research (Photo: Business Wire)

Approximately 28 percent of traders say they are confident that the five-year old bull market will continue for another three to six months, while an additional 25 percent of traders believe it will last through the end of 2014, according to new data captured in Charles Schwab’s most recent Trading Services Sentiment Survey from March 2014. Some 42 percent of those surveyed believe that the bull market will end at some point in 2015 or later, while only five percent say that it has already ended.

Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Res ...

Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research (Photo: Business Wire)

The projection for a sustained bull market comes despite the fact that approximately 20 percent of traders say they have a bearish outlook for the next three to six months, compared with 10 percent of traders surveyed in December 2013.

“Since 1942, only four other bull markets out of 12 have lasted into the sixth year, but the current one remains the second strongest after five years,” said Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research. “Over the longer-term, traders surveyed are overwhelmingly optimistic that the bull market will continue, however, the increasing near-term negativity shouldn’t be ignored. This bull market will need a catalyst to bring down the highs which may turn out to be the ongoing situation in Ukraine. The marked uptick in bearish sentiment in the materials sector may also point to traders’ increasing concern about the overall health of the U.S. economy.”

Sector Outlook

Traders’ feedback on the most bullish and most bearish sectors was in line with responses from those surveyed in December 2013 with the exception of the materials sector, which replaces financials among the most bearish sectors. Specifically, some 20 percent of those surveyed say they are bearish on materials, compared with 10 percent in December 2013. The following is a breakout of the most bullish and bearish sentiments:

Most Bullish   Percentage       Most Bearish   Percentage
Technology   34% Utilities   30%
Healthcare   21% Consumer Discretionary   22%
Energy   18% Materials   20%
   

Additional Survey Findings

  • ETFs: Versatile Vehicles For Traders. According to the survey results, some 34 percent of traders say that they will maintain their current level of ETF trading activity, while nearly 17 percent indicate that they will increase their ETF trading activity and approximately 27 percent plan to learn more about ETF trading.
  • Economics 101. More than a quarter of those surveyed (27 percent) say that consumer sentiment indicators have the most impact on their short-term trading strategies, while approximately 15 percent say GDP is most important – followed closely by jobless claims and the unemployment rate at approximately 13 percent. Interestingly, some 37 percent of all respondents say that their trading strategies are unaffected by economic data.
  • Traders Roam Where They Want To. The latest Trading Services Sentiment Survey also revealed a steadily growing percentage of traders (40 percent) are engaging the markets and conducting stock research away from the home or office using tablets or mobile devices, an increase from 30 percent in September 2013.

Data from the Charles Schwab Trading Services Sentiment Survey were derived from responses of participants in Charles Schwab’s Virtual Trading Event that took place on March 19, 2014.

Schwab provides traders with superior trading platforms, free seminars and workshops, online education resources and 24-hour access to experienced trading specialists, with no minimum trade requirements. For more information, please visit www.schwab.com/trader or call 888-245-6864.

For more information about Schwab’s robust ETF offering, please visit www.schwab.com/etf. Schwab’s extensive library of proprietary market commentary can be found at www.schwab.com/ourperspective, and an overview of Schwab’s mobile offering can be found at www.schwab.com/mobile.

Follow us on Twitter: @Schwab4Traders

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

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