AAII Sentiment Survey Results For Frame Ended 3 June 2015
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
Bullish: 27.3%, up 0.3
Neutral: 48.0%, up 0.2
Bearish: 24.6%, down 0.5
Change from last week: Bullish: +0.3, Neutral: +0.2, Bearish: -0.5
Long-Term Average: Bullish: 38.87%, Neutral: 30.84%, Bearish: 30.29%
Commentary
Even with a slight increase, optimism remains below 30% for a 5th week running in the latest AAII Sentiment Survey; a streak not seen since early Y 2003. Neutral sentiment continues at an unusually high mark,as Pessimism is at below-average marks.
Bullish sentiment
Expectations that stock prices will rise over the next 6 months, edged up 0.3% to 27.3%. Even with the small increase, optimism is below its historical average of 39.0% for the 13th week running.
Neutral sentiment
Expectations that stock prices will stay essentially unchanged over the next 6 months, increased 0.2% to 48.0%. The minor change keeps Neutral sentiment at or above 45% for a 9th straight week; the longest such streak in the survey’s 28-yr history. This week is also the 22nd straight week with a Neutral sentiment reading above its historical average of 31.0%.
Bearish sentiment
Expectations that stock prices will fall over the next 6 months, declined 0.5% to a 5 wk low of 24.6%. The decline keeps pessimism below its historical average of 30.0% for a 9th consecutive week and for the 19th week this year.
As noted above, Bullish sentiment is now below 30% for a 5th consecutive week. This is the longest such streak since a 7-week stretch between 16 January and 27 February 2003.
Bullish sentiment readings below 28.6% are unusually low, and unusually low levels of optimism have typically been followed by better-than-average 6-month and 12-month returns for the S&P 500. Similarly, the S&P 500 has realized better-than-average returns when neutral sentiment is at an unusually high level, as it currently remains.
Causing some AAII members to be cautious or pessimistic are prevailing valuations, recent price volatility, geopolitical events, the pace of economic growth, the impact of the stronger USD on earnings growth and worries that a notable decline in stock prices could occur. Keeping other AAII members encouraged are the ongoing Bull market, sustained economic expansion, earnings growth and still-accommodative monetary policy.
By Charles Rotblut, CFA AAII
Paul Ebeling, Editor
HeffX-LTN
Paul Ebeling
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