AAII Sentiment Survey, 12 January 2017

AAII Sentiment Survey, 12 January 2017

AAII Sentiment Survey, 12 January 2017

$DIA, $SPY, $QQQ

The AAII Sentiment Survey measures the percentage of individual investors who are Bullish, Bearish, and Neutral on the stock market short term, individuals are polled from the AAII Website on a weekly basis.

Only 1 vote per member is accepted in each weekly voting period

This week’s results

Bullish: 43.6%, – 2.6 pts
Neutral: 29.4%, +0.8 pts
Bearish: 27%, + 1.7 pts
Historical averages

Bullish: 38.5%
Neutral: 31.0%
Bearish: 30.5%

Commentary

The percentage of investors describing themselves as Bullish pulled back to a 5-week low in the latest AAII Sentiment Survey. At the same time, Neutral sentiment rose to a 5-week high. Pessimism rose too.

Bullish Sentiment

Expectations that stock prices will rise over the next 6 months, pulled back by 2.6% to 43.6%. Optimism was last lower on 7 December 2015 (43.1%). Bullish sentiment is above 40% for a 9th week running and above its historical average of 38.5% for a 10th straight week.

Neutral Sentiment

Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 0.8% to 29.4%. Neutral sentiment was last higher on 7 December 2016 (30.4%). Neutral sentiment remains below its historical average of 31.0% for the 6th straight week and the 8th time in 9 weeks.

Bearish Sentiment

Expectations that stock prices will fall over the next 6 months, rebounded by 1.7%to 27.0%. The rise was not large enough to keep Pessimism from staying below its historical average of 30.5% for the 9th time in 10 weeks.

This week’s shifts in sentiment are not significant enough to alter the trend that has existed since the week of the Presidential election.

More than 2 out of 5 individual investors have an optimistic short-term outlook for stocks. It is a level of Optimism we have not seen hold relatively steady since the approximate six-month period of August 2014 to March 2015. Though Bullish sentiment is currently high compared to what was registered throughout most of Y 2016, it is within its typical historical range.

The potential impact that President Elect Donald Trump could have on the economy is encouraging some individual investors and creating uncertainty for others. Also influencing investor sentiment are valuations, earnings, consumer sentiment and the magnitude and timing of future interest rates.

This week’s special question asked AAII members for their opinion of the current pace of economic growth.

  1. 26% described growth as slow or below average
  2. 14% described growth as sluggish and/or poor
  3. 15% believe the economy is getting stronger or will gain upward momentum under the new administration
  4. 9% of respondents who say growth is moderate
  5. 7% of respondents said the economy is growing at a good pace.

Charles Rotblut, CFA
AAII Journal

Paul Ebeling, Editor

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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