Bearish sentiment rises to 5-month high
by CI Staff
During the month of March, Bullish sentiment was on a roller coaster ride. It reached its monthly peak on March 11, 2010, at 45.3%. This happened as the Wilshire 5000 gained 4.6% from the end of February through March 11. The market kept rising, gaining another 1.5% through the end of March. However, bullish sentiment fell to a monthly low of 32.4% last week, before rebounding 8.9 percentage points this week.
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We can never be sure of why market sentiment moves in certain directions. A reasonable hypothesis would be that after a long streak of gains, investors grow fearful of a reversal, and take on a more bearish outlook. This "what goes up, must go down" attitude does not always hold true. As this month's movements have shown, as the market continued its rise investors became skeptical that the pace could continue unabated. If anything can be learned it is that investor sentiment is difficult to predict.
To participate in the AAII Sentiment Survey, or to view historical survey results, click on the link below:
http://www.aaii.com/sentimentsurvey
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