Thursday, January 28, 2010

Investors Increasingly More Bearish

Since the end of last year, the trend in individual investors sentiment has turned more bearish. This more bearish sentiment shows in the bull/bear spread declining from +26% at the end of 2009 to -2% this week. Bullish investor sentiment this week came in at 35% and is the lowest level since August last year when the bullishness reading was reported at 51%.

Barry Ritholtz of The Big Picture website comments on sentiment this week as well. He notes in his post referring to asset allocation, American Association of Individual Investors (AAII) Equity Allocations, Deviation versus 21-Year Mean:
"while not as ample [liquidity] as near the lows buying power still remains adequate to power/move stocks higher and keep corrections fairly well contained."

Source: American Association of Individual Investors

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