Question: A technical analysis tool that is sometimes used to predict market movements is an investor sentiment index. AAII, the American Association of Individual Investors, publishes

A technical analysis tool that is sometimes used to predict market movements is an investor sentiment index. AAII, the American Association of Individual Investors, publishes an investor sentiment index based on a survey of its members. In the following table you will find the percentage of investors who were bullish, bearish, or neutral during a four-week period:

What is the investor sentiment index intended to capture? How might it be useful in technical analysis?

Week Bullish Bearish Neutral 37% 52 29 43 25% 14 35 26 38% 34 36 3 I

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