AAII Sentiment Survey: Is This a Signal for a Short-Term Trend Change?

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Bearish sentiment is above its historical average for the first time in seven weeks, according to the latest AAII Sentiment Survey.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 0.5 percentage points to 41.8%. This is a seven-week low and the fourth consecutive weekly decline in optimism. Even with the drop, bullish sentiment is above its historical average of 39.0% for the seventh consecutive week and the 12th out of the last 13 weeks.

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Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 3.3 percentage points to 25.7%. This is a four-week low. Neutral sentiment is also below its historical average of 30.5% for the 19th consecutive week and the 21st out of the past 23 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 3.8 percentage points to 32.5%. This is a seven-week high. The historical average is 30.5%.

The spread between bullish and bearish sentiment, the bull-bear spread, is…

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