Short-term Sentiment is reset, long-term is still structurally over-bullish
In a positive contrary indication the latest readings in the AAII and NAAIM have logically recoiled in line with this week’s bearish market prices.
Here are Mom & Pop, pulling back after we made an alert about their aggressiveness in NFTRH back in April. Now the question is did that signal THE correction or just another routine pullback? The question is still open as US markets have not broken down yet (Semis, Small Caps and Tech are close).
NAAIM are more sophisticated investors than Mom & Pop, but you wouldn’t know it by their positioning.
Stock markets are generally at limit points where routine technical corrections could transition to something worse. Considering that the readings above (and others like them) came from aggressively over-bullish conditions, the bearish scenario could well play out. But the other edge of the sword is that it is possible that this is another reset prior to the ripping of the shorts’ faces off.
Personally, considering I’ve expected a May-July topping window prior to correction, I am not interested in betting one way or the other yet. But the market is bull trending until it is not bull trending. Eh?
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