When Everyone Has Already Bought Into The Rally…

My question to you all today is: Who’s left?

With the extremely high levels of Bullish Sentiment that we covered in a trading video earlier this week, who is left to continue to buy up this market? It’s funny I mention this today because I was just talking about this last night with a coaching student.

Be the Contrarian!

Listen closely to this rationale. If you have a market that is falling lower and lower each day, seemingly without end, you get an overwhelming amount of investors who don’t believe things will turn around. Naturally, they continue to sell off shares at alarming rates and without consideration of risk. Their thought process is “I had better get out now before it gets REALLY bad.” This can be directly seen in the bottom during March 2009.

As it turns out this ended up being the buying opportunity of a lifetime. When everyone was screaming “SELL” you should have been thinking “BUY”. The reasoning behind this is because everyone had already sold stocks, so who was left to keep pushing the market lower? Short interest was high and bullish sentiment was low.

Where Is Sentiment and Short Interest Now?

Now, let’s fast forward to today’s market and chart. Sentiment is extremely bullish – there are more bullish investors in the market now than even before the 2000 DOT.COM bubble! In addition, short interest is at it’s lowest levels since December of 2007.

Once again, my question remains: “If everyone has already bought into this rally, what or who will keep driving prices higher?” Feel free to answer in the comment section below using your Twitter and/or Facebook connection.