US retail investors' optimism soars to a 27-month high as funds flow into technology stocks.

According to the Zhongtong Finance APP, the optimism of individual stock traders in the US soared to its highest level in 27 months before Thursday. The American Association of Individual Investors (AAII) survey showed that the widely watched bull-bear spread remained positive for the seventh consecutive week, rising to 29.9 in the week ending July 19. This is the most optimistic sentiment since April 2021, higher than the previous period's 15.1. Data compiled by Vanda Securities shows that in recent weeks, day traders have flocked to large-cap tech stocks and benchmark exchange-traded funds (ETFs), injecting over $7.2 billion into the stock market in the past five trading days.

In the AAII survey, the percentage of investors holding a bearish view for the next six months dropped to 21.5%, the lowest level since June 2021, while the percentage of investors holding a neutral view also dropped to the lowest level this year. The AAII bull-bear spread rose from 15.1 last week to 29.9. Bulls increased from 41% to 51.4%, neutral views dropped from 33.1% to 27.1%, and bears decreased from 25.9% to 21.5%.

The S&P 500 index fell 0.68% on Thursday, ending a three-day rally, and some technical analysts believe that this benchmark index has already exceeded overbought levels. Data compiled by Morgan Stanley analyst Peng Cheng showed that in the past week, retail investors net bought $3.9 billion in cash stocks, with the majority of the funds flowing into individual stocks, particularly large-cap tech stocks. For investors wondering if the retail investor bull market is excessive, Cheng's team estimates that the returns of tech stocks this year are in line with the overall market, so "it seems that retail investor positions have not been significantly extended."