Thursday, November 13, 2008

When Does The Individual Investor Capitulate?

Interestingly, the individual investor sentiment as reported by the American Association of Individual Investors remains at levels that would suggest the market could correct further. This is only a technical indicator; however, the current bullishness reading of 38.33% remains above levels seen in other bear market bottoms--24.5% in 2002 and 16.5% in 2005. The current reading is down from last week's level of 44.83%. The bull/bear spread deteriorated to -4% versus last week's reading of 12%.

(click graph for larger image)

1 comment :

Anonymous said...

I capitulate when I get a margin call. Other than that I am a firm believer in buy and hold

But I don't use leverage for my investments, so I guess the lower it goes, the more bullish i get - unless of course I get a dividend cut.