In One Chart: Is this really ‘the scariest chart of all?’

If the bulls are falling out of love with this stock market, or even becoming just a bit more unsettled in light of the recent dips, you wouldn’t know it from the level of investor optimism wafting around lately.

It’s not just something as squishy as the concept of “optimism.” They’re actually pouring money into stocks at a feverish pace, according to TD Ameritrade’s Investor Movement Index, which saw a record single-month increase in November:

The colorful Heisenberg blog seized on this trend in the data to raise a red flag for investors at risk of getting too caught up in the bull rush.

“Your imaginations are filled with visions of blowoff tops, spectacular melt-ups, billion-dollar bitcoin BTCUSD, +21.79%  bonanzas, and tech rallies flying off into the wild blue yonder like an ‘unleashed’ Icarus, whose wings refused to melt no matter how high he flew,” the anonymous blogger wrote.

With that in mind, he asked his readers if THIS is “the scariest chart of all”:

As you can see, yes, the crowd is at historically bullish levels. That’s what these kinds of relentless gains can do to retail investors. It’s a lot of fun until it’s not.

“You need the madness of crowds for blowoff tops and melt-ups and other examples of speculative manias where the final act is characterized by figurative and literal buy-in from the entire universe of market participants — complete capitulation to the dark side by all but the most ardent of bears — acquiescence to the rally by everyone but the most incorrigible of skeptics,” Heisenberg explains.

Goldman Sachs GS, +1.06%  says “bullish sentiment alone is not a reason for a correction but increases risk of disappointment.”

Long-disappointed market bears, as Heisenberg points out, are surely “at rock bottom,” which is a pretty good spot to start a comeback.

“Meanwhile, the bulls are higher than a ferret smoking trucker speed,” he added. “The come down from that is pretty rough.”

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