Important support pillars of the US stock bull market show cracks! Concerns about bubbles are emerging, and the willingness of retail investors to "buy on dips" is decreasing.

Retail investors' confidence in the ability of the US stock market to rebound is gradually weakening, as market data and analysts' observations show a decline in their enthusiasm for buying low-priced stocks. Retail investors have been a key driving force behind the market rebound this year, helping the market bounce back from sell-offs and reach new highs. However, analysts say that since the beginning of this month, with the continuous decline in US stocks and a pullback from recent highs, investors' willingness to buy on down days has decreased. James St. Aubin, Chief Investment Officer of Ocean Park Asset Management, said, "Of course, the concept of 'buying on dips' is still widely supported on social media platforms, but investors are now more focused on valuation issues or whether we are in an artificial intelligence bubble." Since the outbreak of the COVID-19 pandemic in 2020, the participation of retail investors in the market has become increasingly important, as more and more isolated investors began paying attention to their investment portfolios. Over the past two years, market analysts and traders have repeatedly pointed out that the behavior of retail investors buying on dips during market volatility has been an important factor in maintaining market stability. Vanda Research stated in reports released this week and at the end of October that their analysis of trading data indicates that retail investors are no longer showing strong confidence as they did earlier this year, a confidence that drove the significant rise in US stocks, such as the rebound after the "tariff drama" in April. The company's analysts stated in their latest report released last Wednesday, "This trend is starting to crack." The day before, Vanda Research said that retail investors' buying volume was the weakest since May and the third weakest daily data since 2025. Viraj Patel, Deputy Head of Research at Vanda Research, said the company even began capturing warning signals earlier. Throughout the summer, he observed individual investors allocating more purchasing funds to speculative stocks, including uranium mining companies, small bitcoin custodial companies, quantum computing stocks, and meme stocks. Patel said, "For us, the real defensive signal appeared in September when we saw overall decreased buying volume of retail stocks and a shift to broad market exchange-traded funds (ETFs) such as the S&P 500 Index ETF or the Nasdaq 100 ETF." Subsequently, later last week, Vanda Research found that investors also began reducing their purchases of these ETFs. Traditionally, ETFs serve as a hedge for investors in times of heightened sentiment. Since early November, other companies have also noticed signs of decreased interest among retail investors. A report released by Bank of America Securities on Wednesday stated that, although they saw strong purchases of broad ETFs in the previous week, all of these trading activities came from institutional investors. In contrast, retail investors have become net sellers for the first time since the end of September. However, some analysts indicate that they are not yet ready to sound the alarm on retail investors' attitude or behavior. Joe Mazzola, Director of Trading and Derivatives Strategy at J.P. Morgan Wealth Management, stated that the company has observed a slight increase in caution among retail investors, but their proprietary sentiment tracker still remains in positive territory. Mazzola said, "Interest in retail investors buying the dip has weakened this month, but it is still a driving factor." Adam Hetts, Multi-Asset Investment Director at Janus Henderson, said, "Without their support, any rebound would become more difficult."