Investors remain curiously reticent in the face of a new
all-time high in the S&P 500 Index (SPX).
The latest AAII investor sentiment poll showed a slight drop in the
percentage of bulls to 38% from last week’s 39%. Meanwhile the percentage of bears fell from
last week’s 33% to 29%.
While bearish sentiment is admittedly low, bullish enthusiasm
is also relatively muted given the extent of the market rally in the first
quarter of 2013. Bull/bear sentiment
readings are similar to what they were in August 2013 after the market rallied
for 10 weeks before settling into a lateral consolidation pattern for a few
weeks. This was followed by yet another
rally in September.
Bottom line: Until we see a notable increase in bullish
sentiment the interim market uptrend will most likely remain intact.
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