AAII sentiment is at 1.6 bulls to bears. Still not at the 2:1 threshold. My god, what's it going to take for people to actually embrace this bull market? A 300% rally?
What this says is that we actually have room to go higher still from here! But with the recent low put/call ratios it's quite likely any gains from here will be given back shortly after. What interesting and bizzare times.
AAII is sentiment poll - for example, I can be long to my gills, but may be looking to invest $10 and say 'Expecting a correction' or bearish. This shows sentiment rather than real positioning. However, the same cant be said about Put/Call.... Nevertheless, this rally is for the record books and more pain for bears once Google reports.
ReplyDeleteLooking forward for your gold piece.
I agree....AAII sentiment is not a money based indicator which is not as valuable as money based ones. But having said that it has been such a great indicator these past several months.
ReplyDeletePut-call ratio has me worried. I think it's at an extreme. Correct me if I'm wrong.
ReplyDeletethe pcr is indeed extreme but like I said earlier, it's probably distorted due to option expiration this week whereby calls are cheap and anyone caught on the wrong side of the market would be prone to scramble for them.
ReplyDeletebut this is only 1 measure of sentiment. As I mentioned AAII sentiment is not extremely bullish by any means and after such a powerful rally since Feburary you would expect to see bulls outnumber bears 2:1 to mark an immanent top. I also noticed mutual fund flows to equities were negative this week! Seems like a lot of people bulls and bears alike are bracing for a correction! You know what that means? It won't happen just yet! I'm sure we're going to get a decent down day soon...perhaps even today but I'm starting to think that we won't see the market roll over in a signficant way just yet untill later this month or early May now.