Is This Overlooked Statistic Signaling Investor Complacency?

Via Dana Lyons’ Tumblr,
The number of unchanged issues on the NYSE has spiked, often a sign of complacency among investors.
While the price structure and breadth in the stock market remain solid and supportive of higher prices, one area of concern that we have been noting is investor sentiment. Specifically, it is too complacent for our liking. Investors and traders seem to be outright dismissing the notion of risk in the stock market. And while extreme bullishness can persist for awhile, it usually ends up being mis-guided, eventually. One potential piece of evidence of complacency comes from a surprising, and typically overlooked, statistic: unchanged issues.
As opposed to advancing or declining issues, unchanged issues are those that close a particular day at the same price at which they closed the day before. Historically, we have found that, for whatever reason, elevated numbers of unchanged issues often occur near market tops of varying significance. This indifference towards large numbers of shares may be a signal of investor complacency during low-volatility, up-trending markets, i.e., out of sight out of mind. Conversely, low levels of unchanged issues are often emblematic of market bottoms as perhaps elevated levels of fear and awareness create a greater impetus to trade stocks.
Presently, it is the former case, i.e., elevated numbers of unchanged issues, that is relevant. In fact, as our Chart Of The Day reveals, yesterday saw the highest percentage of unchanged issues on the NYSE since 2003, and one of the highest readings since the move to decimalization.

This post was published at Zero Hedge on Feb 24, 2017.