Too many bears

According to American Association of Individual Investors, the bull had fallen to its lowest level in two years which means confidence is waning. Also they have not only pulled in their bullish horns, they have jumped clear over the fence and are firmly ensconced in the bear camp. The percentage of bears now sits at 51%. "In the past three years, we have seen the bears in this survey rise to a reading over 50% only a handful of times. Each time we have been within weeks of a tradable rally. Witness the reading of 53.7% on July 17, 2002. Stocks bottomed on July 23 for a 20% rally over the course of the ensuing four weeks. On Oct. 8 of that same year we saw a reading of 54.8% bears. The S&P 500 bottomed on Oct. 9 for another 20% rally, this one lasting a bit longer, at almost two months. On Feb. 19, 2003 we found ourselves with 58.9% bears on this survey; on March 12, we bottomed for a very extensive rally. We have not seen a reading over 50% since then." Real Money commenter Helene Meisler said.