Monday, March 09, 2009
Here are two more pieces of evidence for the truly bleak outlook most individual investors hold for today's stock market. The first is the latest reading of the American Association of Individual Investors weekly poll. A record 70% of those responding were bearish about the market. The chart above (courtesy of Stockcharts.com) shows the last 20 years of poll results and the blue arrow points to the latest week's reading.
Above the sentiment chart you will see the cover from the March 9 issue of Time Magazine (I almost missed this - Thanks to Paul Montogomery, the inventor of the magazine cover indicator, for bringing it to my attention!). This is just one more indication that the public is very bearish on this market. It is especially significant when coupled with the New York Times and Chicago Tribune headlines I pointed out last week here and here. Over the past year this combination of indications has been followed almost immediately by 200 point rallies in the S&P. I think the current situation will be no exception.