STAX Schwab Trading Activity Index Still Low Despite Near Market Highs

Schwab Trading Activity Index, also known as STAX, remains low despite the S&P 500 and Nasdaq markets sitting less than 1% below their record closing highs.

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets near record highs, STAX remains closer to a 6-year low than a 6-year high. 

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Schwab Trading Activity Index

Market Update

II Bulls Over Bulls Plus Bears 1998 to Now

Kirk Lindstrom's Investment Letter 

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2C-P Sentiment Indicator

2C-p = 8.9 and rising from a low of 1.4 on 4/10/25  

Invented by Tom Drake, the 2CS-p is the "5 day moving average of the product of the vix and p/c ratio."   The scale runs from 0 to 100% with 0% max bullishness and 100% max bearish reading for us contrarians.

To calculate 2C-p, Larbro explains: "Take each day's p/c ratio and multiply it by that days vix. Take the sum of those results for that day and the previous 4 (5 total) and percentage rank them from 0% to 100% in terms of size against all the other data you have. The higher the numbers (5-day sum of p/c x vix), the higher the ranking. Then subtract that % ranking from 100% to "invert" the ranking so that lower 2c-p correspond to lows in the market and vice versa.

Chart of S&P 500 and VIX vs Time

In my case they are ranked from today all the way back to Feb 10, 2003, the earliest I have data for. So, in a nutshell if yesterday's 2c-p was 7.8% (which it is) that tells you that only 7.8% of the sum of the 5-day p/c x vix (aka the 2c-p) is lower than yesterday's value."

To read what the sentiment indicators mean to me each month, subscribe to Kirk Lindstrom's Investment Letter

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For current subscribers, see page 6 paragraph one and two for what this Fear & Greed Index chart means to me

AAII Survey: Sentiment Crashes to Near 37-year Lows

 AAII Survey: Bulls minus Bears vs. Log DJIA - 1988 to Today

Kirk Lindstrom's Investment Letter

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2/27/28 Update 12:29 PM PST 

Fear and Greed Index at 20

STAX vs S&P 500 Graphed Over Time

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets at record highs last week, the STAX remains closer to a 6-year low than a 6-year high. 

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US Stock Markets (Log Scale) vs. Fed Funds Rate 

II Sentiment: Investors Intelligence Bulls / (Bulls+Bears) & S&P 500 Weekly

Kirk Lindstrom's Investment Letter

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STAX Schwab Trading Activity Index & Kirk's Dow vs Oscillators Charts

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets at record highs last week, the STAX remains closer to a 6-year low than a 6-year high. 

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Kirk's DJIA vs Oscillators Chart: "Everything before the black dot-dash line is math, everything after is art" and art is aka "guestimates"

Market Update for 11/8/24

Kirk Lindstrom's Investment Letter

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For more information on the STAX, see https://www.schwab.com/investment-research/stax/view-schwab-trading-activity-index

STAX Schwab Trading Activity Index Midband with Markets at Record Highs

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets at record highs today, the STAX is closer to a 6-year low than a 6-year high. 

Market Update for 11/8/24

Kirk Lindstrom's Investment Letter

To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more:

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the November 2024 Issue for FREE!!! 
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Kirk's Latest Investor Sentiment & Other Charts

Market Sentiment Update 

Read  Kirk Lindstrom's Investment Letter to see what these charts meant to me plus the full list of stocks and ETFs are in my "Explore Portfolio" with my price targets to both take profits or buy more shares, depending on market conditions, prices, sentiment and other factors.

Investors Intelligence Bulls / (Bulls+Bears) & S&P 500 Weekly  -  8/8/24

AAII Survey: Bulls & Bears

CPC Put Call Ratio 

Fear and Greed Index Fell to 20 this week and is currently at 22:

From https://www.cnn.com/markets/fear-and-greed

NAAIM EXPOSURE INDEX = 83.93: 

• The NAAIM Exposure Index represents the average exposure to US Equity markets reported by our members.
• https://naaim.org/programs/naaim-exposure-index/

2C-p = 7.8 is VERY Low:  

Invented by Tom Drake, the 2CS-p is the "5 day moving average of the product of the vix and p/c ratio."   The scale runs from 0 to 100% with 0% max bullishness and 100% max bearish reading for us contrarians.

To calculate 2C-p, Larbro explains: "Take each days p/c ratio and multiply it by that days vix. Take the sum of those results for that day and the previous 4 (5 total) and percentage rank them from 0% to 100% in terms of size against all the other data you have. The higher the numbers (5 day sum of p/c x vix), the higher the ranking. Then subtract that % ranking from 100% to "invert" the ranking so that lower 2c-p correspond to lows in the market and vice versa.

In my case they are ranked from today all the way back to Feb 10, 2003, the earliest I have data for. So in a nutshell if yesterday's 2c-p was 7.8% (which it is) that tells you that only 7.8% of the sum of the 5 day p/c x vix (aka the 2c-p) is lower than yesterdays value."

These charts are covered on page 6 of my newsletter with updates during the year for what the different types of sentiment charts mean to me. This is an easy place to give my subscribers updates of charts too numerous to add each month, especially after significant changes.                                                    

For more on investor sentiment and what it means to me, read my newsletter where 

• Page 6 is dedicated to a monthly update on sentiment.
• Page 12 summarizes sentiment and how it relates to five other "Market Factors" I follow to help set my asset allocation..

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Excerpt from my August 2024 Newsletter:

This is not an “exact science” so “all or nothing” market timing is foolish.

Market Timing Disclaimer: No sentiment indicator, or any indicator for that matter, is 100% reliable. I look at sentiment as head winds and tail winds. When sentiment is terrible, then it acts like a tail wind for your returns where you could see further declines, but long term, it is best to be buying when most others are selling. Likewise, if we see sentiment get too bullish, then I would consider lowering my portfolio asset allocation. It seldom pays to be buying stocks when EVERYONE is talking about stocks and how much money they are making at cocktail parties.

In addition, I am not market timing but for a small portion of my Explore Portfolio. I use market-timing indicators to tell me it is a good time to buy so I can add to positions when the market is down and thus help me overcome my fear to rebalance back to my target asset allocation. Likewise, when the market-timing indicators are saying to sell, they usually come when the markets are high where I want to be taking profits. The market timing indicators at market highs help me get over my greed and take profits.