There is sign that the market may need to pull back or digest gains - Two of the most followed sentiment indicators show signs that bears that may have overstayed their welcome are capitulating. The CNN Fear & Greed Index, a sentiment gauge that combines seven different indicators to distinguish what “emotion” is driving the market, has flashed a “greed signal” for over a month. The American Association of Individual Investors’ (AAII), another closely followed sentiment gauge, recently flipped from bears making up the majority to bulls making up the majority. This week marks the first consecutive two-week stretch in which bulls outweighed bears in more than one year. While the sentiment indicators should not be used in a stand-alone manner and are not a timing device, the data should raise investors’ antennas. As legendary General George S Patton once warned, “If everyone is thinking alike, then somebody isn’t thinking
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