Pragmatic Capitalism

Practical Views on Money & Finance


Bearish sentiment continued to spike in the latest week according to the AAII sentiment survey.  The latest bearish reading surged 6.4% to 43.1% – the highest reading since early November.   Bearish sentiment has jumped 16% in 3 weeks.   Despite this, the levels are not excessive compared to the historical averages:

“Though bearish sentiment is currently well above the historical average of 30%, it is not at levels that would suggest it is excessive. For example, in February 2009, bearish sentiment crossed above 55%. (It reached a 12-month high of 70.3% on March 5, 2009.)  Therefore, while there is a possibility it could be nearing a short-term peak, it would not be surprising to see bearish sentiment remain at or rise from current levels.”

Bullish sentiment fell to 29.2%, but remains off of levels that were seen at prior major market lows:

Source: AAII

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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