Posted on 09/12/2010 9:04:44 AM PDT by blam
Retail Investors Have Suddenly Become Massively More Bullish
Vincent Fernando, CFA
Sep. 12, 2010, 5:14 AM
Retail investor has whip-sawed from substantially pessimistic to substantially optimistic in the course of just a few weeks according to a survey from the American Association of Individual Investors (AAII).
Trader's Narrative:
This level of overall bullishness is the highest since late April 2010 and the highest percentage of bulls since mid April, just as the market made an important top. The nominal level of bullishness isn’t the only thing that concerns me. It is also the fact that retail investors have a very short attention span and are willing to forgive and forget at the drop of a hat. Until we see true capitulation (with continuing reluctance to jump aboard an ensuing rally) it is difficult to see a way out of this choppy malaise.
In my view the AAII survey isn't very robust given how often it fluctuates between extremes, but perhaps says something relevant for short-term trading. Note that the survey simply asks people whether they are bullish or bearish on the market for the next six months, which probably explains its volatility. Generally, I much prefer fund flow data, such as that from the Investment Company Institute, since it shows not what people say, but what they do.
Still, what's nice about the AAII survey is that it comes out quickly and often.
[snip]
(Excerpt) Read more at businessinsider.com ...
Seeing as the fundamentals which would cause real people to actually BUY stuff which in turn would cause the retailer to have a reason for confidence have in fact grown worse, this is a totally useless survey, at least for the purposes of seeing any kind of a trend.
...my hunch is that the DOW will be locked into a 9500 to 10500 range for a while...it’s the uncertainty Obama’s administration puts on business...throwing out Dems in Nov will help...but until we get rid of him in ‘12 the economy won’t be totally free to get moving up
Here comes Santa Claus
And what they have been doing for the last 18 weeks in a row is getting out of the market, possibly just to make the mortgage payment:
“...but until we get rid of him in ‘12 the economy won’t be totally free to get moving up.”
####
Agreed, but it also will be depend on how easy it will be to undo his racist Communist garbage AND if the “Republicans” in power have the courage and resolution to do so.
Better off with the sailboat today because you don't have that much time left to enjoy it.
I’m a member of the AAII, which consistently provides excellent investment information and education.
Their “member polling” and commentary are puzzling however. With the most anti-business Administration and Congress in history, they have remained ridiculously upbeat concerning the investing environment.
“...AND if the “Republicans” in power have the courage and resolution to do so.”
...that’s the part that really concerns me too!...too many RINOs think that they need to be pals with Dems.
The only reason anyone has any money left to spend is because they're not paying their mortgages.
In an economy like this it’s more about keeping the money to provide for the basics for the future because there doesn’t seem as if there will be much of an opportunity to accumulate anything more then what you have.
This is why consumer spending is off so much. And without robust consumer spending this economy and with it consumer confidence is dead in the water.
I used to be an AAII member and followed these charts. Note the March ‘09 bearish sentiment. That was probably one of the better buying opportunities of a generation.
For the record, retail investors as a group almost always wrong. They sell high and buy low.
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