Wednesday, January 26, 2011

AAII Sentiment Survey - Week Ending 1/25

Well, quite a change in sentiment this past week.  Bullish sentiment dropped from 50.7% last week to currently 42.0%.  Meanwhile bearish sentiment rose from 29.1% to currently at 34.3%.  I present two charts below comparing the SPX to bullish sentiment and SPX to Bull / Bear spread.  As you can see below, both have correlated very well.  Two thoughts I have is that (a) this market is truly set for a decent correction and (b) the correction will be fast and if you blink you may miss it.  The reason I say it may be fast is the fact that bearish sentiment has moved up so fast and the market still makes new highs.  Regardless of my view / interpretations, the data speaks for itself.

Screen shot 2011-01-26 at 11.18.07 PM

Screen shot 2011-01-26 at 11.18.22 PM


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