These Contrarian Indicators Suggest the Bottom Is In

Since 1987, the American Association of Individual Investors ('AAII') has been conducting a survey... Each week, the AAII asks its members the following question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral) or down (bearish)? Over the past 35 years, the average […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] These Contrarian Indicators Suggest the Bottom Is In By Sam Latter --------------------------------------------------------------- [Wall Street legend pinpoints perfect market downturn stock]( Legend who called bottom of COVID-19 crash zeroes in on the best stock to [buy today](. --------------------------------------------------------------- Since 1987, the American Association of Individual Investors ('AAII') has been conducting a survey... Each week, the AAII asks its members the following question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral) or down (bearish)? Over the past 35 years, the average bullish reading – that is, the percentage of those surveyed who think the markets will rise – is 38%. The average bearish reading is 31%. The AAII survey has proven to be a useful data point and a simple way to gauge investor sentiment over time. The most bearish reading ever came on March 5, 2009... That day, 70% of respondents registered as bearish. Four days later, the market bottomed and kicked off the longest bull market in history. Take a look... The second most bearish reading came on October 19, 1990, at 67%. Eight days earlier, the market had bottomed, and 14 months later, the S&P 500 had rallied more than 40%... The AAII sentiment survey recently hit its most bearish reading since March 2009... An incredible 59% of respondents were bearish. In the following graphic, you can see how rare this reading is... So the million-dollar question is, how do stocks perform after these extreme bearish readings? We've seen 72 instances where the bearish reading has registered 50% or higher dating back to 1987. On average, stocks are 7% higher after six months, 10% higher after a year, and 20% higher after two years. And the results are even better than that if you look at the four other times when the reading was this bearish... As you can see, stocks were up an incredible 20% six months later, 33% a year later, and 46% two years later. --------------------------------------------------------------- Recommended Link: ['SELL THIS POPULAR STOCK IMMEDIATELY']( Wall Street legend Marc Chaikin just released details on his five favorite stocks – little-known opportunities poised to potentially return 3 to 5 times gains in the next 90 days while most stocks continue crashing. Today, you can get the name and ticker of one of these stocks, 100% free... plus, one popular stock to SELL immediately. [Click here for details](. --------------------------------------------------------------- But the AAII survey isn't the only extreme sentiment we're seeing out there today... Our friend Jason Goepfert, who runs the excellent SentimenTrader website, recently noted that intermediate-term optimism among investors was at its lowest level since March 16, 2020. That marked one week before the market bottomed during the COVID crash, before rallying almost 115% over the next 22 months. Jason also recently pointed out the long-running Barron's cover curse, which over the past several years has been a fantastic contrarian indicator. Take a look at the cover of this recent issue, out on Monday, May 23... Only time will tell how this Barron's cover will play out... But it wouldn't be fair to single out Barron's... Plenty of other media outlets are guilty of poorly attempting to time the market. On May 5, CNBC ran a special segment called "Markets in Turmoil," which it has trotted out several dozen times dating back to mid-2010. Charlie Bilello, founder and CEO of Compound Capital Advisors, tweeted that it's "the only indicator with a perfect track record" and shared the following graphic... Of course, we'd never suggest basing all of your investment decisions on sentiment alone... But it does remind us of the quote from the legendary Warren Buffett, who said that investors should be "fearful when others are greedy, and greedy when others are fearful." Today, it's clear that investors are as fearful as they've been in years – more than they were at the COVID bottom... the bottom of the dot-com bubble... the debt ceiling crisis... Brexit... and almost any other period over the past three and a half decades. We'll end today's missive with an indicator of our own... Whitney, who CNBC nicknamed "The Prophet," nailed the top in 2000 before the dot-com bubble burst, as well as the top in 2008... In December 2008 on 60 Minutes, he called the bottom of the stock market – just prior to the start of the longest bull market in history... He called the top in bitcoin to the day in 2017 and the top in pot stocks to the hour in 2018... And in mid-May, he may have called another bottom to the day, telling his readers he was investing his own money into "beaten-down stocks of real businesses that generate real cash flows." Given his long and impressive streak of calling tops and bottoms – and given all of the other data points we've laid out today – we're not willing to bet against Whitney. And right now, he has found a stock that he says could soar by 1,000% over the next couple of years. In fact, as he put it, "If I had to invest my wife's full retirement account in one stock (again)... Hands down, this would be the one." [Learn more here](. Regards, Sam Latter June 4, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](