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:
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.