Bulls Are Undeterred

This week's sentiment survey by the American Association of Individual Investors shows bullish sentiment remains essentially unchanged from the prior week at 37.33%. This compares to the long term average of the bullish sentiment reading of 39%. The bearishness level did increase to 44% versus last week's bearishness level of 37.97%. The net result is the bull/bear spread came in at -6.67% versus last week's spread of 0%. As the below chart notes, the market advance has been significant since the bullishness level hit 25.32% in early March.

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Comments

[I need more...:]

They were undeterred in Sept of '87 as well.

Sep 11 01:28 PM

[logicalthought:]

I'm just starting to leg into some shorts here (not having done it two hundred S&P points ago because I'm trying to remain solvent longer than the market can remain irrational), but frankly, from a "contrary indicator" standpoint, the amount of bearishness (and lack of bullishness) in this survey scares me a little. Even though it's just one data point among many, I'm not sure if this market can go down significantly with a negative "bull/bear spread" among retail investors. On the other hand, I'm not sure that this is still a truly representative sample of retail investors, as I'm perceiving a lot more interest in the market these days among "casual observer" friends and acquaintances, and I'm wondering if many of those type of folks gave up their AAII memberships after the crash of 2000-2002.

Sep 11 11:58 PM

[Glen L.:]

What is the average P:E ration now, something like 130? Does dot com boom mean anything to anyone? What more evidence do we need the bulls are as irrational as cows eating loco weed?

Of course, the irrationality can outlast your ability to stay solvent (paraphrasing the evil Keynes), but this IS the Macro View, and I AM rational in the macro sense. We are one just a reality check or two away from a major stock collapse. Listen to gold.

Sep 13 12:31 AM