Thursday, November 19, 2015

Bullish Investor Sentiment Takes A Hit

Today's Sentiment Survey release by the American Association of Individual Investors saw bullish investor sentiment fall 3.5 percentage points. This follows a decline in bullish sentiment of 4.7 percentage points in the prior week. Also, during this two week period, bearish sentiment has increased from 18.6% to 38.68% this week.

From The Blog of HORAN Capital Advisors
Source: AAII

The individual investor sentiment indicator is a contrarian one and is most predictive at its extremes. Bullish sentiment readings near 20% are generally associated with an oversold market. As we noted in our post this morning regarding potential near term market technical headwinds, if a pullback ensues, bullish sentiment is likely to decline further. If this does occur, this could position the market for a rally into year end.

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