AAII Sentiment Survey, 23 February 2017
$DIA, $SPY, $QQQ
AAII Sentiment Survey: Optimism at 6-Week Highs
The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat or fall over the next 6 months.
The survey period runs from Thursday (12:01a ) to Wednesday (11:59p).
This week’s AAII Sentiment Survey results:
- Bullish: 38.5%, + 5.4%
- Neutral: 29.2%, – 5.3%
- Bearish: 32.3%, -0.1%
- Bullish: 38.5%
- Neutral: 31.0%
- Bearish: 30.5%
Optimism among individual investors about the short-term direction of the stock market is at a 6-week high, according to the latest AAII Sentiment Survey. The rebound is happening as Neutral sentiment is at a 7-week low. Pessimism is essentially unchanged from a week ago and remains above its historical average.
Expectations that stock prices will rise over the next 6 months, jumped 5.4% to 38.5%. Optimism was last higher on 11 January 2017 (43.6%). The rise puts Bullish sentiment even with its historical average of 38.5%.
Expectations that stock prices will stay essentially unchanged over the next 6 months, fell 5.3% to 29.2%. Neutral sentiment was last lower on 4 January 2017 (28.6%). The historical average is 31.0%.
Expectations that stock prices will fall over the next 6 months, is 32.3%—a decline of just 0.1%. Pessimism remains above its historical average of 30.5% for the 5th time in 6 weeks.
Though Bullish sentiment had been below average over the 5 previous weeks, it was never unusually low. Rather, optimism had merely fluctuated within the lower half of its typical range before rebounding to back to its historical average this week.
This week’s rebound in optimism comes as both large- and small-cap stocks rose to new record highs. Not all individual investors are encouraged by the continued rally with some worrying about valuations or a forthcoming pullback.
The potential impact that President Donald Trump could have on the domestic and global economy continues to cause uncertainty or concern among some investors, and encouraging others.
Also influencing investor sentiment are earnings, consumer sentiment and the magnitude and timing of future interest rate increases.
Charles Rotblut, CFA
Paul Ebeling, Editor