Bullish Signals Amidst Market Uncertainty: Is It Time to Buy?

As readers know, I have been extremely bullish on the markets for both stocks and crypto since late September. However, the going has been extremely tough for the better part of three months now. Sentiment is terrible, the macro outlook is bad, and people are giving up on investing in droves.

The spotlight has turned to crypto this week as stocks continue to make new lows on fears of a broader war. I don’t know about you, but 2022 was just last year, and it feels very similar to the grim outlook people had after the Ukraine conflict started. Looking back we can say that none of that ww3 talk ever materialized. It goes back to the old saying 90% of the things we worry about never come true.

And today a lot of investors are worried about a market crash that will likely never come true. At least not for now.

This is the American Association of Individual Investors sentiment survey. As you can see in the chart as of last week 43 percent of investors were bearish. I’m sure that number has only increased as of this week. On the bottom you can see historical averages and that tells us most people are usually bullish to the tune of 37 percent. Looking back at past data this index usually tops out on the bearish side in the mid 40’s to mid 50’s range. We haven’t seen the data for this week yet but I’m sure its closer to 45%.

When we overlay this sentiment with what time and price are telling us what we have is a buying opportunity that does not come around very often.

I already gave you several historical cycles that suggest this market will rally into year end but let’s look at some more recent evidence that we could be looking at the lows in this market right now.