Just One More Thing...

The chasm between tech and most other parts of the market can be seen again this morning, as the Nasdaq flirted with red earlier but buyers defended the $290 level on the QQQ ETF. With the Dow, S&P, and small caps all still red albeit off their own morning lows, I am keeping a close eye on tech to see if the reflexive buying makes another run higher into Thanksgiving. 

But I have my doubt about that.

In the latest AAII sentiment survey, seen below, it looks like some of the highest readings in years in terms of bullish percentage. 

My best guess about this spike in bullish percentage is that a hotly-contested election could not bring the market down, alongside the lack of a second stimulus package from Congress. Both factors simply led to more shorts being squeezed, essentially, and hedges burned down. 

As I posited earlier this week, we may be headed into a much better trap to see actual downside as virus restrictions begin to materialize in many places across the country (and globe) again. 

Either way, we know a bullish percentage over 50% tends to lead to much more muted returns for the coming weeks.