AAII Sentiment Survey Results For Frame Ended 7 October 2015

AAII Sentiment Survey Results For Frame Ended 7 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: 37.5%, + 9.4

Neutral: 34.3%, + 2.3

Bearish: 28.2%, + 11.7

Change from last week
Bullish: +9.4
Neutral: +2.3
Bearish: -11.7

Long-Term Average
Bullish: 38.74%
Neutral: 30.96%
Bearish: 30.30%

Commentary

Individual investor optimism about the short-term direction of stock prices is at its highest mark in more than 6 months, according to the latest AAII Sentiment Survey. Neutral sentiment also rose, Pessimism plunged.

Bullish sentiment

Expectations that stock prices will rise over the next 6 months, rose 9.4 percentage points to 37.5%. This is the highest level of Optimism recorded by the survey since 26 March 2015 (38.4%). The rise was not large enough to prevent Bullish sentiment from staying below its historical average of 39.0% for a record 31st straight week.

Neutral sentiment

Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 2.3 percentage points to 34.3%. The increase keeps Neutral sentiment above its historical average of 31.0% for the 4th straight week and the 37th week this year.

Bearish sentiment

Expectations that stock prices will fall over the next 6 months, fell 11.7 percentage points to 28.2%. Pessimism was last lower on 23 July 2015 (25.6%). The historical average is 30.0%.

The rebound in Bullish sentiment occurred as stocks rebounded from their late-September lows. It also follows last week’s low level of Optimism. Bearish sentiment, on the other hand, pulled back from a reading that was near the top of its historical trend.

This week’s shift in sentiment reflects Optimism on the part of some individual participants that a bottom in the market has been set. Sentiment among individual investors remains mixed with some having bought on the dips and others having increased their cash positions.

Impacting AAII members’ 6-month outlook for stocks are global and international events, particularly China and global economic weakness, US monetary policy, technical factors, seasonal trends, the recent correction or the chance of further price declines occurring, US politics and the slow pace of US economic growth.

This week’s special question asked AAII members how, if at all, they have recently adjusted their stock investing strategy.

30% said they have not made any change, many said that they are following long-term strategies, while others said they intend to ride out the current volatility.

16% said that they reduced their stock holdings and are now holding more cash.

15% favor dividend-paying stocks.

14% favor value, 6% are seeking growth and 5% said large-cap stocks. Some respondents listed more than 1 style or asset class.

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