Summary
- Bullish sentiment, expectations that stock prices will rise over the next six months, rose 0.3 percentage points to 24.7%.
- Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased by 1.7 percentage points to 33.5%.
- Bearish sentiment, expectations that stock prices will fall over the next six months, rose by 1.4 percentage points to 41.8%.
Pessimism among individual investors about the short-term direction of the stock market rose to a four-week high in the latest AAII Sentiment Survey. Neutral sentiment fell but remained above average, and optimism stayed around the same level.
Bullish sentiment, expectations that stock prices will rise over the next six months, rose 0.3 percentage points to 24.7%. Bullish sentiment remains below its historical average of 37.5% for the 49th consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased by 1.7 percentage points to 33.5%. The decline puts neutral sentiment above its historical average of 31.5% for just the third time since the end of July.
Bearish sentiment, expectations that stock prices will fall over the next six months, rose by 1.4 percentage points to 41.8%. Pessimism is above its historical average of 31.0% for the 52nd time out of the past 55 weeks. It is also back an unusually high level for the first time in four weeks.
The bull-bear spread (bullish minus bearish sentiment) is –17.1%. This is well below the historical average of 6.7%.
Historically, the S&P 500 index has gone on to realize above-average and above-median returns during the six- and 12-month periods following unusually low readings for bullish sentiment and the bull-bear spread. Unusually high bearish sentiment readings historically have also been followed by above-average and above-median six-month returns in the S&P 500.
Concerns about the economy, inflation, corporate earnings and volatility in the stock market continue to cause many individual investors to maintain a cautious short-term outlook.
This week’s AAII Sentiment Survey results:
- Bullish: 24.7%, up 0.3 percentage points
- Neutral: 33.5%, down 1.7 percentage points
- Bearish: 41.8%, up 1.4 percentage points
Historical averages:
- Bullish: 37.5%
- Neutral: 31.5%
- Bearish: 31.0%
The AAII Sentiment Survey has been conducted weekly since July 1987. The survey and its results are available online.
For further details see:
AAII Sentiment Survey: Bearish Sentiment On The Rise