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Hickey and Walters (Bespoke) submit: One of the reasons for the market's strong performance since the start of April is that earnings expectations heading into the month were too low. At the start of the month, analysts were looking for Q1 earnings to rise by less than four percent. As the month went on and company after company beat EPS forecasts, the analysts had to follow suit. Low expectations plus strong earnings equals fireworks to the upside, and that's exactly what investors got.

On a longer term perspective though, it appears as though the closer the S&P 500 gets to its old highs, the less likely analysts are to embrace this bull market. As the chart below illustrates, of the entire universe of US equities, analysts rate a lower percentage of those stocks as buys than at any other time over the last ten years.

click to enlarge
analyst sentiment

Source: Analyst Bearishness Reaches Multi-Year High