AAII Sentiment Survey Results For Frame Ended 6 April 2016
$DIA, $SPY, $QQQ, $VXX
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 sentiment voting frame
Data represents what direction members feel the stock market will be in the next 6 months
Sentiment Survey says:
Bullish: 32.2%, + 5.0 pts
Neutral: 46.3%, – 0.7 pts
Bearish: 21.5%, -4.3 pts
Historical averages:
Bullish: 39.0%
Neutral: 31.0%
Bearish: 30.0%
Commentary
Pessimism among individual investors about the short-term direction of stock prices is at its lowest level in 5 months, according to the latest AAII Sentiment Survey. Nonetheless, less than 33% individual investors are Optimistic.
Bullish sentiment
Expectations that stock prices will rise over the next 6 months, rebounded by 5.0% to 32.2%. The rise mostly reverses last week’s drop. The increase is not enough to prevent Bullish sentiment from staying below its historical average of 39.0% for the 22nd week running and the 55th out of the past 57 weeks.
Neutral sentiment
Expectations that stock prices will stay unchanged over the next 6 months, receded 0.7% to 46.3%. This is the 10th straight week and the 62nd out of the past 66 weeks 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, fell 4.3% to 21.5%. This is the lowest level of Pessimism recorded by our survey since 3 December 2015 (21.2%). It is also the 6th straight week Bearish sentiment is below its historical average of 30.0%.
Though Pessimism is near the bottom of its typical range, Optimism remains relatively low though still within its typical range.
During 20 out of the past 21 weeks, less than 33% individual investors expressed Optimism about the short-term direction of the stock market.
Bullish sentiment has only exceeded 33% 2X since mid-November, on 10 March (37.4%) and 24 March (33.8%).
Giving individual investors cause for concern is the slow pace of US economic growth and uncertain global economic growth, terrorism and global unrest, lackluster corporate earnings and the prevailing level of valuations.
Some AAII members are encouraged by the sustained domestic economic growth, expected corporate earnings growth and still-low energy prices.
This week’s special question asked AAII members what one thing they would change about the market environment if they had a magic wand.
35% of respondents said politics, particularly the election, tax reform, regulation and fiscal policy.
Monetary policy was listed by 13% of respondents.
Higher interest rates, more stable market conditions and Crude Oil prices were each named by 7% of respondents.
By Charles Rotblut, CFA, AAII Journal
Paul Ebeling, Editor
HeffX-LTN
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