ISEE equity call-put readings fell back below 2.0 on Friday, signaling retail investors are showing less appetite for call buying even as U.S. stocks sit at record highs.
A 2.24 reading earlier was the highest since June, but the 10-day average still shows enthusiasm peaked in mid-January and never returned to prior extremes.
Market complacency has deepened at the same time: the VIX is at its lowest level of the year, and sentiment gauges are nearing overly bullish territory.
Breadth is also thinning, with new highs in a 500-stock group dropping to 16 from 67, suggesting fewer stocks are driving the indexes' latest gains.
The divergence matters because retail investors had been on the right side of key moves this year, buying the March low and participating in the spring semiconductor rally.