The stock market has dropped, but has it dropped enough?
Dalton — The Dow Jones Industrial Average ended last week down 0.7 percent. That was the fifth week of consecutive losses for the popular stock market index, its longest losing streak since 2011. Although the market was only down about 4 percent at the time, apparently that was enough to freak out a lot of people.
The American Association of Individual Investors investor sentiment survey was crushed last week, with bullish sentiment declining to 24.71 percent from 43.12 percent just two weeks ago, which was the highest reading of the year. That was the largest two-week drop in bullish sentiment since June 2013 and brought it below its historical average of 38.21 percent. The last time bullish sentiment from the AAII survey was this low was in late December of last year, and what followed that was a monstrous rally.