Market Pulse: Coronavirus Vaccine Gives Sentiment a Huge Shot in the Arm


    News of Pfizer’s coronavirus vaccine last week pushed stocks to new highs. It also had a big impact on sentiment, as measured by the American Association of Individual Investors.

    The organization’s weekly survey is a popular guestimate of the crowd’s psychology. It plunged from about 40 percent bullish in February (pre-pandemic) to the lows 30s in March. The number of “bearish” respondents also rose above 50 percent and stayed there for months.

    Until that week, it is. The vaccine seems to have triggered two milestones:

    • The percentage “bullish” spiked from 38 percent to 56 percent. That’s the highest since January 2018.
    • The 18 percentage-point change was the biggest positive swing since July 2010.

    See also: This Chart Highlights the Sharp Swing Toward Small Caps

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    David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.