AAII Sentiment Survey Results For Frame Ended 21 October 2015
$DIA, $SPY, $QQQ
The AAII Investor Sentiment Survey measures the percentage of individual investors who are Bullish, Bearish, and Neutral on the stock market for the next 6 months; individuals are polled from the ranks of the AAII membership weekly. Just 1 vote per member is accepted in each weekly voting frame.
Data represents what direction members feel the stock market will be in the next 6 months.
AAII Investor Sentiment Survey Update
This week’s Sentiment Survey results:
Bullish: 34.8%, + 0.7
Neutral: 41.2%, + 2.4
Neutral: +2.4
Bearish: -3.1
Neutral: 30.97%
Bearish: 30.29%
Commentary
Now, for the 1st time since the market’s correction occurred in August, more than 40% of individual investors describe their short-term outlook for stocks as being “Neutral,” according to the latest AAII Sentiment Survey. Pessimism fell further, while optimism edged up.
Bullish sentiment
Expectations that stock prices will rise over the next 6 months, rose 0.7 percentage points to 34.8%. With the increase, optimism remains below its historical average of 39.0% for a record 33rd week running.
Neutral sentiment
Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 2.4 percentage points to 41.2%. Neutral sentiment was higher on 6 August 2015 at 44.0%. The increase keeps Neutral sentiment above its historical average of 31.0% for a 6th straight week, and for the 40th week this year.
Bearish sentiment
Expectations that stock prices will fall over the next 6 months, declined 3.1 percentage points to 24.0%. The historical average is 30.0%.
Neutral sentiment is back to an unusually high mark. Readings above 39.6% are more than 1 standard deviation above the historical mean. Such readings have previously been correlated with above-median returns for the S&P 500.
Even though there is optimism on the part of some individual investors that a bottom in the market has been set, sentiment overall is mixed.
Some AAII members bought on the dips while others increased their cash positions.
Impacting AAII members’ six-month outlook for stocks are global and international events, US monetary policy, technical factors (seasonal trends, the recent correction or the chance of further price declines occurring), US politics and the anemic pace of US economic growth.
This week’s special question asked AAII members if a market-related factor or if a fiscal policy-related matter has a greater impact on their 6-month outlook for stocks, 64% said market-related factors, particularly citing monetary policy, earnings and valuations, 31% said that a fiscal matter has a greater impact. These members particularly cited the debt ceiling, the debt, the deficit and the budget standoff.
Charles Rotblut, CFA, AAII Journal
HeffX-LTN
Paul Ebeling, Editor
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