Jordan Kahn’s “Get Mental!” Investor Psyche Diary for January 31, 2025

TRADE UPDATE: The stock SWI had a great run after breaking out last October. In December it entered a correction, but looks to be close to completing its most recent base. The company reports earnings next week, but I am contemplating taking a half position ahead of results. Nothing done yet, but I will keep folks posted.

SENTIMENT UPDATE: Bullish sentiment continued to rise last week, but is still not at levels I would consider extreme. The bull-bear spread on the II survey rose to +21% from +20%; the AAII survey went to +29% from +24% (but recently it was +32%). The bulls on Market Vane did rise to 62%, which is the highest level since last July. Ditto for the NAAIM survey which rose to 56.3. Last year the bulls on Market Vane rose to 67% before topping. So I bet we can get a mild pullback in the market and rally again, which would likely bring out higher levels of bullishness - and that might signal a bigger correction in the cards.