"The Silence of the Bulls" was the title of the latest Global Fund Manager Survey from Bank of America Merrill Lynch.
This survey is designed to give us an idea of how fund managers are thinking right now... And they're scared today, as the headline suggests.
CNBC says it's bad news. Fund managers are worried about a market top.
I think it's the opposite... The Fund Manager Survey is great news to me.
It tells me the big money is still on the sidelines. That cash will need to do something. If it flows back into the stock market, then prices can go dramatically higher from here...
The fear from fund managers tells me the next leg of the "Melt Up" hasn't really taken off yet.
Individual investors are scared, too...
For the first time since Trump was elected in 2016, more people expect the stock market to fall than to rise. (That's according to a monthly survey by The Conference Board, an independent research company.)
I love it. Institutional investors are scared... And individual investors are scared. This is the kind of extreme sentiment that's setting up the next leg of the Melt Up.
Meanwhile, my "early warning" indicators for a market top are showing no red flags.
For example, look at the advance/decline line – one of my favorite early warning indicators.
It's a pretty simple idea... It shows the number of advancing stocks in a day minus the number of declining stocks. In other words, when the line goes up, it shows that more stocks are rising than falling, and vice versa.
This indicator started falling well in advance of the last Melt Up peak in stocks (back in the dot-com days). This indicator told us ahead of time that the boom was on shaky ground... that the market's "vital signs" weren't good.
Today, we don't have this problem. This indicator is approaching new highs...
Again, the advance/decline line started falling more than a year before the dot-com bust in 2000. As you can see today, this is not a problem at all right now.
Or, take another of my early warning indicators... the Russell 2000 Index, a big basket of small-cap stocks.
We look at this index because quite often, small-cap stocks start to fall apart before the major stock market indexes fall.
Today, it's not falling apart at all yet – instead, even with the recent volatility, it's close to new highs. Take a look...
So we are in this incredible moment...
Stocks are hated: Institutional investors and individual investors are scared.
Meanwhile, the market's fundamentals are healthy. My early warning indicators show no cracks in the bull market yet.
This is a fantastic situation. I believe it's setting up what could be the last great buying opportunity of the Melt Up. And I urge you to take advantage of it.
It feels scary out there today. But the opportunity is huge. You want to put money to work now.