Yale University Survey: Crash Confidence Indicator

The Yale  School of Management regularly surveys individual and institutional investors on  their stock market crash confidence.  Specifically, they ask the survey  taker how confident he/she is that the there won’t be a stock market crash  within the next six months.
According to the latest read crash confidence is at its lowest level since early 2009.  In other words,  investors are increasingly worried about an imminent market crash.

However, this could also be a bullish contrarian indicator.  Back in  2009, this similarly low reading in the crash confidence index was followed by a  monster bull run in the stock markets.

From Yale:

Confidence that there will be no stock market  crash in the succeeding six months generally declined (though with a lot of ups  and downs) over the years since 1989 until the stock market bottomed out in late  2002. Just after the terrorist attacks of September 11, 2001, Crash Confidence  actually rose a little. But Crash Confidence reached its lowest point at 20.79%  for institutional investors and 28.95% for individual investors as of November  2002. Crash confidence reached its all-time low, both for individual and  institutional investors, in early 2009, just months after the Lehman crisis,  reflecting the turmoil in the credit markets and the strong depression fears  generated by that event, and is plausibly related to the very low stock market  valuations then. The recovery of crash confidence starting in 2009 mirrors the  strong recovery in the stock market.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Major US US Futures Europe Asia Commodities 2yr Euro Yields 10yr Euro Yields Oil
  • DOW 15,318.20 0.91%
  • NASDAQ 3,482.18 0.87%
  • S&P 500 1,651.81 0.78%
  • VIX 16.61 -1.13%
  • SPX 500 (CFD) 1,648.30 -0.21%
  • DOW (CFD) 15,297.00 -0.14%
  • NASDAQ 100 2,992.10 -0.13%
  • EURUSD 1.339 -0.02%
  • UK 6,374.21 0.69%
  • GERMANY 8,229.51 0.17%
  • FRANCE 3,860.55 -0.08%
  • SPAIN 8,180.20 0.54%
  • H. KONG 20,962.00 -1.24%
  • JAPAN 13,116.50 0.84%
  • KOREA 1,887.62 -0.68%
  • SHANGHAI 2,130.65 -1.33%
  • NAT GAS 4.16 0.17%
  • GOLD 1,364.60 -0.15%
  • SILVER 21.92 1.10%
  • COPPER 3.16 0.21%
  • FRANCE 2YR 0.19 -10.90%
  • GERMAN 2YR 0.18 27.74%
  • ITALIAN 2YR 2.18 27.59%
  • SPAIN 2YR 2.81 8.21%
  • FRANCE 10YR 2.13 1.96%
  • GERMAN 10YR 1.57 3.22%
  • ITALIAN 10YR 4.29 0.52%
  • SPAIN 10YR 4.55 -0.68%
  • WTI 98.43 -0.01%
  • BRENT 106.02 0.00%
  • WTI/BRENT 7.59
  • 321 CR SPR 21.96 10.04%