Here’s an image from my morning article, to my friends in finance and real estate. We’ve been talking about the negativity and what this shows is numerically, just where people are. Granted, this image focuses in on the stock market, but the stock market is a major driver for all things financial.
Now, before you think I’m crazy, there’s a lot of data on this chart and it all means something. The red line is the American Association Of Individual Investor Bullish minus Bearish Data over the past several years.
Note, the black line is the S&P 500.
Periods of extreme negativity are generally very good times to get into the stock market. Sure it may not feel that way, and we may have further down to go, but generally, several weeks to months after these periods you’ll be rewarded…
We are approaching one of those periods now. It may even be today…
I am predicting a summer rally… I may be alone. But by the time everyone joins in on my thesis, we’ll be looking to get out. I hate to think like the crowd…
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*The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.