Last week we pointed out the extreme in bullishness was not good for the bulls and we subsequently got a swift pullback on Friday and Monday.
AAII Sentiment Survey Results: Back at Extreme. What’s next?
This week has completely flipped and now is starting to favor the bulls. The bullish percent plummeted below 30% to 29.82% and bearishness nearly DOUBLED in 1 week to near 40%! These are both levels where the risk/reward moving forward starts to favor the bulls.
The last time bullishness got this low and bearishness got this high was the last week of December and we all know what happened next…
That said, as always, this is just one indicator to have in your back pocket to supplement fundamental analysis, technical triggers, and other market indicators. Like all indicators, it is best used as a barometer, not a crystal ball. Extreme readings can get more extreme, or stay extreme for longer than expected – but for this week the numbers are favoring the bulls.
