When gauging investor sentiment, the two most popular surveys that track bullish sentiment are the polls conducted by Investors Intelligence of newsletter writers and the American Association of Individual Investors (AAII) survey of its members. As shown below, both measures have shown improvement in recent weeks and have broken their downtrends of the last several months. Given that investor sentiment is typically a contrarian indicator, high readings of bullishness are generally considered negative for the market. However, with current bullish sentiment readings below 50%, these are hardly levels that can be considered extreme.
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