Bad Company

The AAII survey of individual investors is out and it is not comforting to the bears. Bearish sentiment is at its highest since October 6, 2011 while bullish sentiment is the lowest since September 22, 2011. Retail investors are bearish on a grizzly level and they are not known for their market timing skills.

The vast majority of the sentiment gauges I look at support the idea that investors are extremely negative. I don't believe investors are as negative as the AAII survey suggests as  they type of negativity we saw this Fall is seen once every few years and I don't think we are anywhere near that type of sentiment. The lone sentiment index supporting the bears is Rydex, where there are still too many bulls. We are not yet oversold but we will get their shortly if the market continues lower.

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