While the percentage of bulls
(51%) is the highest ever for this poll, there simply isn't enough history to know if that number represents the top of the normal range
. The survey has not even existed during a complete bull
/bear cycle, and it will take another decade or so to before there is sufficient data to know where the extremes of the range will be. That said, after looking at how other, more venerable sentiment polls have behaved over the years, I think the range will eventually be something in the area of 50-55% for a high and 20-25% for a low.
While is is generally accepted that sentiment polls are normally looked upon as contrary indicators, Schwab's news release has an upbeat tone regarding the high bullish
“With major indices nearing record highs, our active trader client base is becoming increasingly optimistic,” said Kelli Keough, vice president of active trading at Charles Schwab. “As confidence improves and these bullish traders more eagerly embrace the market, we are seeing them adopt trading strategies that can help them manage risk and generate income.”
Certainly, there is a period during a bull market when the bulls are right, even when there a lot of them, but I don't think I will ever look upon an abundance of bulls as a particularly good thing. Of course, Schwab's objective is different than mine.
Conclusion: The Charles Schwab Active Trader Sentiment Survey is useful in that it polls a new and distinctive group -- active traders -- but it s human nature that people's outlook, no matter what group they are in, will become more positive when the market is behaving in a positive way, and I think we will find that this poll's results will be similar to that of other polls.
The fact that the poll currently has the highest number of bulls ever in it's four-year history is somewhat meaningless since there is no long-term dataset to provide context
. All we can say is that it is more or less consistent with other polls in that currently they also show high percentages of bulls.