Given the low bullish sentiment, some technical analysts also believe see this as a signal to buy since investors may soon want in on the markets. [Advisors Turn More Bullish on Stock ETF Rally]
“The sharp two-day decline that kicked off this week was enough to send some bulls heading back to the bear cave,” Bespoke Investment Group said Thursday. “After rising to its best levels since early April, individual investor sentiment declined from 43% down to 40.2% according to the American Association of Individual Investors (AAII). Given that equities were trading at what were by some measures historically overbought levels, it is understandable that investors had an itchy trigger finger.”
iShares S&P 500 Index (NYSEArca: IVV)
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Max Chen contributed to this article.