AAII Sentiment Survey: Bearish Sentiments Reaches Four-Month High
Bearish sentiment rose by 14.7 percentage points to a four-month high as both bullish and neutral sentiment fell in the latest AAII Sentiment Survey.
Bullish sentiment, expectations that stock prices will rise over the next six months, fell 5.5 percentage points to 29.0%. This puts optimism near the bottom of what has historically been the normal range of readings. It is also the third time in four weeks that bullish sentiment is below its historical average of 39.0%.
Neutral sentiment, expectations that stock prices will stay essentially unchanged, plunged 9.1 percentage points to 28.2%. This is the first time in 13 weeks that neutral sentiment is below its historical average of 30.5%.
Bearish sentiment, expectations that stock prices will fall over the next six months, spiked by 14.7 percentage points to 42.9%. This is the largest weekly increase in pessimism since April 11, 2013. The historical average is 30.5%.
Pessimism is now at an unusually high level following the second large jump in bearish sentiment this year. On April 11, bearish sentiment surged by 26.3 points to 54.5%. After the April jump, pessimism pulled back over next four consecutive weeks.
Bearish sentiment has been rising recently, with this week’s increase marking the sixth consecutively weekly increase…