Although January has gotten off to a strong start for the stock market, there's not a lot of confidence the market bottom has been reached, according to a survey of wealthy investors conducted this month by E-Trade Financial and provided exclusively to CNBC.
Recent trading patterns have contributed to renewed market optimism with headlines that the U.S. and China are moving closer to resolving their trade differences. The Dow Jones Industrial Average finished with a gain of 336 points on Friday and is up over 13 percent since Christmas Eve, posting its first four-week winning streak since August.
Yet despite the rally, there have been big increases in bearishness among investors with at least $1 million in a self-directed brokerage account.
They are much more likely now than they were during the volatile fourth quarter to take the view the U.S. economy is not strong enough for the Fed to raise rates. A rising percentage of these investors even believe we have already entered a recession. They are adjusting their overall asset allocation with defensive moves.
When last surveyed by E-Trade, these investors were dealing with heightened November volatility, though nowhere near the extreme dive that was yet to occur in December.
At that time, 62 percent of these investors remained bullish. In the January survey, that fell to 44 percent, with a majority 56 percent describing themselves as bearish when it comes to the current market. Only 45 percent of these investors believe the market will rise this quarter.