Thursday, July 24, 2008

Bullish Sentiment Inches Higher

The American Association of Individual Investors' Sentiment Survey released this week shows a continued increase in bullish investor sentiment. The bullish sentiment level increased to 35.8% versus last week's reading of 25%. The bull/bear spread narrowed to -8% from last week's spread of 33%.

Why pay attention to sentiment indicators? An old Wall Street saying goes something like:

"the crowd is right in the trends and wrong at the ends"

(click on chart for larger image)

More information on the application of sentiment indicators can be found at the Investment U website and the article Investor Sentiment Indicators.

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