Investor Bullish Sentiment Suggesting Market Move To The Upside

One aspect of the individual investor sentiment reading is it tends to be more predictive at extreme reading levels. In that regarding the American Association of Individual Investors reported that this week's individual investor bullish sentiment reading was 28.49%. This is the lowest bullish sentiment level since August of last year when the bullish sentiment level was reported at 20.74%.

From The Blog of HORAN Capital Advisors

Several external factors are undoubtedly impacting investor sentiment at this point in time, i.e., instability in the Middle East and fallout from the earthquake in Japan. The issues in Japan, especially the nuclear crisis, will likely be resolved one way or another within several weeks. The instability in the Middle East will most likely be an ongoing factor that influences market volatility.

At the end of the day, company fundamentals continue to remain attractive. Attractive valuations and low levels of bullish sentiment are suggestive of a market rebound near term.