The rip-roaring market ascent since late August has been breathtaking, but has hit a bit of a roadblock of late. Is this a breather or the start of something more sinister? No market ever goes up in a straight line without some sort of pullback or pause, but I feel that there is a bit more pain for the bulls before the market advances again. I will provide three reasons.1. There are still too many bulls out there as measured by the AAII Investor Sentiment Survey. As of last week, 57.6% were bullish, up 9.3% over the past week. This is way above the long-term average o 39%. This means that there are too many investors that expect the market to keep going up. History has shown that extremes in market sentiment point to the market going the other way. The number of bulls must decrease for the rally to continue in earnest.
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