The American Association of Individual Investors reported an 8.2 percentage point decline in bullish investor sentiment to 31.6% this morning. This is the lowest bullishness level since bullish sentiment was reported at 30.89% in early August of 2014.
This decline in bullish sentiment has occurred at a time when the S&P 500 Index appears to be nearing an oversold level. As the below chart shows, the technical stochastic indicator has fallen to an oversold level. The money flow indicator and MACD indicator have yet to confirm an oversold level; however, the market does appear to be nearing a potential bounce level. In the recent past the 150 day moving average has served as a support level for the S&P 500 Index and it will be important that this level (2017) is held in this recent pullback.
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