AAII Sentiment Survey, 25 January 2017

AAII Sentiment Survey, 25 January 2017

AAII Sentiment Survey, 25 January 2017

$DIA, $SPY, $QQQ

The percentage of individual investors describing their short-term market outlook as “Neutral” is at its highest level since the election.

The survey period runs Thursday through Wednesday, and many of this week’s votes were recorded before the DJIA rose above 20,000 last Tuesday.

This week’s AAII Sentiment Survey results:

  • Bullish: 31.6%, – 5.4%
  • Neutral: 34.9%, + 4.6%
  • Bearish: 33.5%, + 0.8%

Historical averages:

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

Commentary

The percentage of individual investors describing their short-term market outlook as “Neutral” is at its highest level since the election, according to the latest AAII Sentiment Survey.

Pessimism is also higher, while Optimism has continued to pull back.

Bullish Sentiment

Expectations that stock prices will rise over the next 6 months, fell 5.4% to 31.6%. Optimism was last lower on 2 November 2016 (23.6%). The historical average is 38.5%.

Neutral Sentiment

Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 4.6% to 34.9%. Neutral sentiment was last higher on 2 November 2016 (42.0%). This is just the 3rd time Neutral sentiment has been above its historical average of 31.0% since the Election of Donald Trump as President.

Bearish Sentiment

Expectations that stock prices will fall over the next 6 months, edged up 0.8% to 33.5%. Pessimism was last higher on 2 November 2016 (34.3%). This is the 1st time that Bearish sentiment is above its historical average of 30.5% on back-to-back weeks since the election.

Since starting Y 2017 at 46.2%, Bullish sentiment has pulled back by a cumulative 14.6%. Over the same frame Neutral sentiment and Bearish sentiment have risen by 6.4 and 8.3%, respectively. All 3 of the indicators remain within their typical historical ranges.

The record highs set by the NAS Comp have drawn a mixed reaction, with some individual investors viewing it as a positive and others viewing it as a sign that the market is overvalued or at risk of pullback.

The survey period runs Thursday through Wednesday, and many of this week’s votes were recorded before the Dow Jones industrial average rose above 20,000 on Tuesday.

The potential impact that President Trump could have on the economy is causing uncertainty or concern among some investors, but encouraging others. Also influencing investor sentiment are valuations, earnings, consumer sentiment and the magnitude and timing of future interest rate increases.

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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