The Daily Sentiment Index of NASDAQ traders pushed to 94%, which made the 5-day average rise to 92.4%. This is the most extreme reading in over 14 years and the third highest on record. Traders are nearly certain that the NASDAQ will continue to rally from near current levels. Traders are as bullish as at any time in the data’s history.
All types of investors get interested in the markets at the top of every bull trend, and they get scared out at bottoms.
Since people’s hopes and fears are the engine of the market their hopes make it go up and their fears make it go down the result is that most people must lose money. Their fears make them sell out near bottoms, and their hopes make them become fully invested near tops.