Subject: Re: CNN Index at 77 = "Extreme Greed"
The AAII Investor Sentiment Survey Bullish Percentage is also very high and increasing:
Date Bullish Neutral Bearish
20-Dec 52.90% 26.20% 20.90%
13-Dec 51.30% 29.40% 19.30%
6-Dec 47.30% 25.30% 27.40%
29-Nov 48.80% 31.70% 19.60%
22-Nov 45.30% 31.10% 23.60%
15-Nov 43.80% 28.10% 28.10%
8-Nov 42.60% 30.20% 27.20%
1-Nov 24.30% 25.40% 50.30%
Complete historical data available from:
https://www.aaii.com/files/sur...
A typical use of the indicator (from AAII's discontinued Market Dashboard) is:
A bullish signal is generated when the percentage bullish reading drops to 25% and then rises the next week; a bearish signal is generated when the percentage bullish reading rises to 50% and then drops the following week. If neither of these conditions is being met, the indicator is neutral. In addition, if no new confirming signal is generated within six months after a bullish or bearish signal is generated, or if a signal is the opposite direction is not generated within six months of a bullish or bearish signal is generated, the indicator will revert back to neutral.
An article discussing its use:
Is the AAII Sentiment Survey a Contrarian Indicator?
https://www.aaii.com/journal/a...
A key takeaway from the article is its final "concluding point: Never rely on a single indicator when forecasting market direction. Rather, consider a variety of factors—including prevailing valuations, economic data, Federal Reserve policy, government policies and other prevailing macro trends—and allow for a large margin of error in your forecast. As the saying attributed to John Maynard Keynes goes, the market can stay irrational longer than you can stay solvent."
JRB