This week's release of the American Association of Individual Investors weekly sentiment survey shows bullish sentiment increased over 13 percentage points to 63.28%. This is the highest level the bullishiness reading has reached since November 18, 2004. Shortly after the November 2004 period, the 8-period moving average reached almost 57% and the market experienced a small correction of about 3%.
|From The Blog of HORAN Capital Advisors|
As regular reader of this blog know, the investor sentiment reading is a contrarian indicator. As a result increasingly higher bullishness readings are one factor to consider when evaluating whether or not the market is overbought. The 8-period moving average does smooth the volatility that is associated with the weekly sentiment figures.