The bullish sentiment reading reported by the American Association of Individual Investors fell over 11 percentage points this week. This week's bullishness reading was reported at 21.64% versus last week's reading of 32.91%. The bull/bear spread widened to a negative 35% versus last week's spread of minus 6%. The equity market performance is contributing to this high level of bearishness and low level of bullishness.
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Additionally, as reported at the end of 2008, cash levels were at 18-year highs and cash continues to build. Bloomberg reported in December:
The $8.85 trillion held in cash, bank deposits and money- market funds is equal to 74 percent of the market value of U.S. companies, the highest ratio since 1990, according to Federal Reserve data compiled by Leuthold Group and Bloomberg....
Leuthold Group, whose Grizzly Short Fund returned 83 percent in 2008 thanks to bets against equities, said in its December bulletin to investors that stocks offer "one of the great buying opportunities of your lifetime."
Cash at 18-Year High Makes Stocks a Buy at Leuthold
By: Eric Martin and Michael Tsang
December 29, 2009