What wall of worry?
The S&P 500 Index is heading for its longest streak of monthly gains since 2007, and, as Bloomberg reports, investors are betting there’s more to come.
A sudden jump in trading of bullish options on SPY (the ETF tracking the S&P 500), means there has not been more 'investors' holding S&P 500 Calls relative to Puts since Summer 2016…
Notably the last four times that investors were so levered long, things did not end well for stocks…
- Aug 2015 – down 8% (China deval/flash-crash)
- Sep 2015 – down 7.4%
- Jan 2016 – down 7%
- Aug 2016 – down 5%
And judging by the decoupling between stocks and risk, something is ready to break…