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The extreme reading of this sentiment indicator makes me nervous (there is always something that makes me nervous). I like to invest when this indicator shows extreme bearishness.
Not sure how extreme this reading is, since it has been higher 4 times this year according to the graph, which is pretty hard to smooth. It's usually best to invest into negative sentiment, but I'm not sure I'd portray the AAII members as the dumb money. If they read their journal for a couple of years, they can't help being reasonably educated. I think the author had some inches to fill and needed a topic.
Sorry. My mistake. I was thinking of Investors Intelligence, which I had just looked at. The number of bears (14.3%) is as low as its been since 1987. But regardless of what one looks at, there is a lot of complacency--which could last for some time before it corrects.
Comments
It's usually best to invest into negative sentiment, but I'm not sure I'd portray the AAII members as the dumb money. If they read their journal for a couple of years, they can't help being reasonably educated.
I think the author had some inches to fill and needed a topic.