In last week's update on bullish sentiment, we noted that following three straight weeks of increases in bullish sentiment, investors clearly picked the wrong time to turn positive. That quickly changed this week. According to the American Association of Individual Investors (AAII), bullish sentiment fell from 38.5% last week to 28.82% this week. This was the largest one-week decline since May, and it completely erased the gain in bullish sentiment that we had seen over the last three weeks. With last week's election keeping the status quo in terms of the balance of power in Washington, fears over the impact of the fiscal cliff have intensified.
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