The AAII Bullish Sentiment Index, also known as the AAII Bull Index, is a sentiment indicator that measures the percentage of individual investors who are bullish about the stock market's short-term prospects.
This index is published weekly by the American Association of Individual Investors (AAII) and reflects the sentiment or optimism levels among individual investors.
How to Interpret It:
- High Bullish Sentiment: High levels of bullish sentiment may indicate market optimism and potential overvaluation, suggesting a contrarian signal that the market may be nearing a peak.
- Low Bullish Sentiment: Conversely, low levels of bullish sentiment may signal pessimism and potential undervaluation in the market, indicating a contrarian signal that the market may be bottoming out.
This index should continue moving up for a sustainable bounce, instead of setting a sequence of lower highs as it did during the Aug-Oct correction in 2023.
$S&P 500(.SPX)$ is the index in the bottom.
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