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Thursday
Apr042013

Bullish Sentiment Drops For Third Straight Week

Individual investors continued to show less enthusiasm for equities this week as bullish sentiment dropped for the third week in a row.  According to the American Association of Individual Investors (AAII), bullish sentiment dropped from 38.4% down to 35.5%.  Since hitting a high of 52.3% in January, bullish sentiment has now dropped by 32.2%.  With readings like this, it is hard to argue that investors are overly optimistic.

While individual investor sentiment is often considered to be a contrary indicator for equities, over the last two years declines in bullish sentiment have preceded drops in the equity market.  

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