a 30 to 50 point gain in the S&P 500?

wnd4

The AAII Investor Sentiment Survey was just released for the week just ended and again it showed a decline in bullish sentiment to 25.6% of participants. Readings below 30% have generally been a good contrarian indicator, implying buying opportunities may now be present. In fact, for the past several years, readings below 30% have generally been good for a 30 to 50 point gain in the S&P 500 over the period following the survey results. This was even the case during the market slide in 2008 and 2009 where short-term gains were witnessed in the midst of the long-term plunge in equity indices. There is no doubt that investors are concerned about current uncertainties, and we certainly cannot predict when and where shocks will occur, but over the short-term equity markets are providing appealing entry points that correspond nicely to the month-end/holiday tendencies that typically give lift to key benchmarks.

[wnd4] Look ZT about the seasonality of the week following Memorial Day holiday:
"The week following the holiday historically has been one of the strongest weeks for U.S. equity markets."
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