Sentiment Turns Highly Bullish

AAII is out with its latest investor sentiment survey and the change in investor sentiment is nothing short of stunning – At least I was quite surprised to see such a large change in just one week. Perhaps it is optimism surrounding the new year or Tuesday’s big rally made everyone much more confident. Whatever it is, investors are the most bullish they have been since early February (just before the S&P 500 pulled back roughly 4%) and the least bearish they have been since December 2010. Remember that sentiment surveys are often contrarian indicators, however, in trending environments sentiment can remain at extremes for extended periods of time. Regardless, this is definitely something to keep an eye on as earnings season kicks off next week.

AAII Investor Sentiment Survey

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