8 Minute Read

Tackle Today: Bears… Bears everywhere

September 22, 2022

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«Sentiment Sinks to Extremes.»


Measuring the emotions of the masses takes on many forms. Some indicators look at what investors do. Others look at what they say. Those who use sentiment gauges believe they help spot extremes like when the crowd becomes too bullish or too bearish.

“The public is often right during the trends, but wrong at both ends.”

Humphrey B. Neill

“You want to be greedy when others are fearful and fearful when others are greedy.”

Warren Buffett

“When everybody thinks alike, everyone is likely to be wrong.”

Humphrey B. Neill

One sentiment indicator making the rounds today is the AAII Investor Sentiment Survey. It asks individual investors their thoughts on where the market is heading in the next six months. Historically, when everyone is bearish – you should be bullish and vice versa.

This week, over 60% of respondents were bearish. It’s only the 5th time in history (the survey started in 1987) that we’ve seen so many bears.

As for the last four times this happened, the market was up more than 33% on average one year later.

Video Of The Day: Jedi Options – How to structure a Long Straddle into a volatile event

In today’s Jedi Options, Coach Tyler explains how to structure a #longstraddle into a volatile event. #optionstrading.

Chart of the Day: AAII Sentiment Survey

Chart of the Day: AAII Sentiment Survey (source: Carson Investment Research)

Hat tip to @ryandetrick.

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