Thursday
Sep162010
Just Make Up Your Minds
Thursday, September 16, 2010 at 10:08AM We've talked in the past about the lack of conviction in this market, but the results of this week's sentiment survey from the American Association of Individual Investors (AAII) are still surprising. According to the survey, bullish sentiment increased to 50.89% which is the second highest reading in two years. Three weeks ago, investors hated equities and bullish sentiment hit it second lowest reading in the last two years. Today, they can't get enough of them. It's amazing what a few up days can do for market sentiment.
Reader Comments (2)
AAII should not be viewed in a vaccum. Investors Intelligence (II) also publishes a weekly sentiment survey. Wednesday's data revealed a rebound in the # bulls, but nowhere near the parabolic levels seen by the AAII survey. In fact even after the past 2 weeks gains, II remains ~1-std dev below normal.
Such extreme bullishness is the sign to go short; just as two weeks ago the bearishness was the signal to go long.
In the linked article I wrote that Yentervention has restarted a sell off in currencies that will produce a sell off of stocks globally. I also encourage short selling or better yet investing in gold.