Loading ...The drop in AAII bulls could be a buy signal for the stock market
[There’s just no way this stock bull will ever end-too many bears-stocks do well after mid-terms-then there’s the Santa rally—and the Good King Wencelas rally and so on and so forth.]
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As the U.S. stock market began its recent reversal, Wall Street bulls hit the exits at a rapid-fire rate. In fact, the National Association of Active Investment Managers (NAAIM) exposure index dropped by nearly 32 points, or 37%, last week — the biggest point drop since August 2013, and the biggest percentage drop since February 2016. Meanwhile, the American Association of Individual Investors (AAII) poll showed the largest reduction in self-proclaimed bulls so far in 2018. Here’s what that could mean for the stock market.
Specifically, AAII bulls — or those who feel the direction of the market will rise over the next six months — plummeted by 15.1 percentage points in the week ended Wednesday, Oct. 10, marking the largest one-week drop since November 2017, according to Schaeffer’s Quantitative Analyst Chris Prybal. Most of those investors migrated to the bearish camp, with self-identified bears rocketing higher by 10.3 percentage points