Market sentiment could be a threat to the bull market in early 2025, says Renaissance's Jeff deGraaf

we are back Bitcoin just below 100,000 we'll continue to watch it 98 and change almost 99 it did hit that Milestone of course earlier 100K and it's not the only corner of the market showing Animal Spirits according to our next guests Renaissance macro research chairman and head of technical research Jeff degraph good to see you again welcome back nice Scott thanks FR me what what else do I need to be I I don't know if wary of is is the right way to say it but what else do you suggest is showing what you think

is animal spirits yeah well look that I mean that's an important part of a bull market obviously you want to um you want to be a part of those Animal Spirits as they building you want to be wary of those Animal Spirits as they get frothy and I don't think we're we're there yet we can certainly talk about that but uh you know we look at a lot of different aspects of the market uh one of those being the IPO Index right so um how are new issues doing relative to seasoned issues because obviously they

tend to be more speculative um without the track record and you know the the Battle Scars if you will um those are making new highs uh that index looks actually really really impressive to us um another aspect of this would be high beta versus low beta names um particularly on a sector neutral basis so even high beta say utilities versus low beta utilities uh are outperforming and and that tends to be uh that tends to be good news and then finally um you know just to put a pin in it is uh cyclicality the cyclical

are outperforming the defensive names uh that tends to be good news historically so I like the the building of the animal spirits I do think sentiment can uh can be an impediment at some point but I think that's after the beginning of the year I think that's sometime probably starting in in February or late January but until you until we start to see more evidence of that I think the uh the signposts are still pointing towards uh this uh this bull market being intact I mean when when does it get access do you have numbers

in mind I mean you must in certain certain levels as as a technician what what makes you say okay now it's getting a little crazy yeah it's less about levels unfortunately I'd love to give you a hard level it's it's really more about the data that we look at and so you know we'll look at the option pricing we'll look at uh some of this sentiment survey and really you know for us what what becomes interesting is if the uh the sentiment is out of line versus the historical returns and so uh you know if

we see a lot of bulls but we really haven't made much price progress in uh in the market that becomes a dangerous sign that's not happening here we're we're still in good shape we have about the same number of bulls that we'd expect given the types of returns that we've had over the last couple months so I think we're uh we're still okay there but I do suspect I mean about 60 65% uh of our cinnamon indicators are flashing some type of Warning Sign uh they usually are early at a top so you know again

I think seasonality is is a more important indicator here uh than than those uh sentiment signals but it's certainly worth watching and I think it will be important at some uh some point in time probably in early 2025