The AAII bullish survey declined this week from 44% to 39%. 39% remains an elevated level and is a clear sign of the recent optimism surrounding the markets. Combined with insider selling, technicals, and mutual fund flows it’s clear that we’re beginning to see the signs of a potential market topping process. Small investors can’t buy enough and sentiment has shifted sharply – both are major contrarian indicators.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.