Markets have healed a bit. The psyche of investors and traders? Not so much!
That’s the conclusion you reach when you look at multiple measures of investor sentiment. Since I’ll be attending the Stocktwits Cashtag Awards Wednesday evening in New York, let’s use THEIR indicator – the Stocktwits Sentiment Index – for the MoneyShow Chart of the Day.
Not much bullishness there. As of late last week, it was still at its highest (most bearish) level since the index was launched in 2018.
Source: Stocktwits
What about CNN’s Fear & Greed Index? It rose a BIT last week from the “depths-of-despair” levels it was hanging out in the week before. But three of its seven component indicators were still in “Extreme Fear” territory. Only one was in the “Greed” zone.
Source: CNN
As for the investors who participate in the American Association of Individual Investors (AAII) weekly poll? They tip-toed a BIT further out of the bear cave in the last week. The bearish percentage slipped to 55.5% from the 61.9% peak we saw at the beginning of April. But on a historical basis, these are still VERY elevated levels.
Data by YCharts
Just as bullish sentiment readings don’t always signal an imminent market top, bearish sentiment readings don’t guarantee a bottom is in. But these do fall in the “potential contrarian indicators” category. And this is a market that can use all the help it can get after a rough couple of months!
