Bullish Investor Sentiment Lower Than Level Reached In 2009

|
Includes: DIA, QQQ, SPY
by: David I. Templeton, CFA

The American Association of Individual Investors reported another decline in bullish sentiment on Thursday morning. Bullish sentiment was reported at 17.8% and comes in below the level reached at the depths of the financial crisis in 2009. The lowest reading in 2009 was 18.9%, and occurred in early March of that year. A number of market technical indicators have turned positive, as we noted in a few posts over the past several days. Now, with bullish sentiment coming in at an extremely low level, it is not a surprise that the market has bounced higher over the course of the past week. Investors are reminded - this is a contrarian indicator and is most predictive at its extremes.