Sentiment now so giddy that a correction is ripe/Shipping cost update/Earnings comments/Overseas

Measured before yesterday's selloff, the level of bullishness continues to get even more extreme. In the Investors Intelligence survey, the Bull/Bear spread rose to 46.9, the most since 2021 with Bulls up at 63.6 vs 62.7 last week. Bears slipped to 16.7 from 17.9. In today's AAII survey, Bulls rose another 3.5 pts to 52.7, the most since December and just .3 pts from a level last seen in April 2021. Bears did tick up too, with the balance going to the Neutral side, to 23.4 from 21.7 in the week prior. 

Bottom line, combine the above with the continued rise in Euphoria as measured by the Citi index and we are ripe for more than just a one day correction in order to shake out this giddiness. It could be perfect timing too with big tech earnings over the next few weeks. 

AAII Bulls

After taking a rest last week, shipping costs continue to rise as measured by the World Container Index on particular journeys. The Shanghai to Rotterdam trip now costs $8,267 for a 40 ft container vs $1,667 at the beginning of the year and vs around $2,000 in February 2020. While still well below the nearly $15,000 seen in October 2021, it's the most expensive in two years. We did get relief though on the Shanghai to LA route where prices fell $224 w/o/w to $7,288, though which still compares with $2,100 at the end of 2023. I'll stretch this view out and mention the Shanghai to NY trip as prices here rose $225 w/o/w to $9,612, tripling this year. It was about $2,800 in February 2020 and peaked at $16,138 in September 2021. 

Bottom line, I'll say again, someone is going to have to eat these sharp gains, especially ahead of the holiday shipping season. We are seeing evidence that companies are front loading their shipments so as not to get caught short ahead of the holidays which in turn could be helping to lift shipping prices overall.