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C’mon Bounce

We had one of the lowest bullish readings ever on the AAII Sentiment survey.  That’s not surprising, of course, after the worst start for stocks EVER.

 

aaii

 

I’ve been quite bearish on US stocks for awhile – the combo of high valuations, and a trend rolling over isn’t a good setup for a long trade.  However, buying into awful sentiment is usually a smart thing to do.  Just pulling up the 10% most bullish and bearish sentiment readings since 1987, and future returns:

 

aaiii

Lots and lots of posts in the archives on reversion strategies.  We may trigger a few this month if the current prices hold…

 

 

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