Like every Thursday, the American Association of Individual Investors publishes the results of its survey. Surprisingly, this last one has been an interesting one, since the results are clear: the market is pessimistic.
As we can see, the proportion of the market that calls itself "optimistic" (Bullish) has not stopped shrinking since last month. Similarly, the proportion of "pessimists" (Bearish) continues to increase.
Market declines during the third week of the year have caused those that were called "Neutrals" two weeks ago to dip into negative sentiment this week.
Is there a market opportunity?
As we already mentioned in the post The Majority Is Not Always Right, this indicator can be used as a contrarian: when investors are too optimistic, it is a sign that the market is overheating. Likewise, when gloom sours Wall Street, buying opportunities abound. Will the majority be right this time?