The AAII Sentiment Survey for the Frame Ended 12 October 2016

The AAII Sentiment Survey for the Frame Ended 12 October 2016

The AAII Sentiment Survey for the Frame Ended 12 October 2016


The AAII Investor Sentiment Survey measures the percentage of individual investors who are Bullish, Bearish, and Neutral on the US stock market for the next 6 months,

The AAII Investor Sentiment Survey has become a widely followed measure of the mood of individual investors. The weekly survey results are published in financial publications and are widely followed by market strategists, investment newsletter writers and other financial professionals.

Data represents what direction members feel the stock market will be in next 6 months.

Investor Update: Pessimism rebounded, and is now above its historical average for 5 out of the past 7 weeks.

This week’s results

Bullish: 25.5%,- 3.3 pts
Neutral: 40.8%, – 2.5 pts
Bearish: 33.7%, + 5.8 pts
Historical averages:

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


Pessimism among individual investors about stock prices dropping rebounded in the latest AAII Sentiment Survey. The rise in Bearish sentiment occurred as both Bullish sentiment and Neutral sentiment fell.

Bullish sentiment

Expectations that stock prices will rise over the next 6months, fell 3.3% to 25.5%. The drop puts Optimism below its historical average of 38.5% for the 49th week running and the 82nd out of the past 84 weeks.

Neutral sentiment

Expectations that stock prices will stay essentially unchanged over the next 6 months, pulled back by 2.5% to 40.8%. Even with the drop, Neutral sentiment remains above its historical average of 31.0% for the 37th straight week.

Bearish sentiment

Expectations that stock prices will fall over the next 6 months, rose 5.8% to 33.7%. The increase puts Pessimism above its historical average of 30.5% for the 5th time in 7 weeks.

Pessimism has largely stayed above its historical average since the end of August. Though higher than the levels seen in July and most of August, Pessimism has stayed within its typical historical range. Optimism is currently at an unusually low level, and has been for 4 out of the past 5 weeks.

Causing concern for some investors is the possibility of the stock market experiencing a larger drop than what occurred in mid-September, valuations, the November elections, global economic uncertainty and the pace of corporate earnings growth.

Giving other individual investors reason for Optimism are the perceived lack of investment alternatives, corporate earnings, low/stable energy prices and sustained, economic growth.

This week’s special question asked AAII members what sectors, if any, they think are overvalued right now.

  1. Technology (10%)
  2. Dividend payers (9%)
  3. Utilities (8%) were the most-listed sectors and segments
  4. 15% of respondents said that either all or most sectors are currently overvalued
  5. 18% said that no sectors are currently overvalued.

By Charles Rotblut, CFA

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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