The latest survey from the American Association of Individual Investors is something of a red flag for equity markets. Sentiment in the survey jumped to jumped to 41.7% from 28.0%. That's the biggest one-week surge since January and also the highest reading since the July 3rd peak at 45.0%, which was the high of the year.
The number isn't a raging sell signal but it's above the long-term average of 37.5% for the first time in 7 weeks.
Notably, there is a big divide in the market with bearish sentiment at 42.4% and still above the long-term 31.0% average.
As for the bullish side, the all-time high of 75% came right at the peak of the dot-com bubble on January 6, 2000. More recently, the 2021 peak was 56.9% in early April that year and it wasn't until December of that year that the market peaked and rolled over.
Another interim peak was in July 2024 when it hit 52.7% bullish and that was followed in very short order by a 9.7% correction that was halted when the Fed began to signal rate cuts.
In short, I wouldn't be too worried yet but keep an eye on this indicator if it gets above 50% and certainly above 55%.
This article was written by Adam Button at investinglive.com.Hence then, the article about us stock market sentiment is getting a tad frothy was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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