AAII Sentiment Survey: Neutral Sentiment Bounces Back
The proportion of individual investors expecting a flat market over the next six months is back above 30 percent, according to the latest AAII Sentiment Survey. This week’s results also show that bullish sentiment remains above average, while pessimism is lower. Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 0.5 percentage points to 43.6 percent. The increase keeps optimism above 40 percent for the 12th time in the past 14 weeks and the 14th in the last 18 weeks. The historical average is 39.0 percent.
Neutral sentiment, expectations that stock prices will stay essentially unchanged, rose 3.7 percentage points to 31.4 percent. This is the first time in four weeks, and just the second in the past seven weeks, that neutral sentiment is above its historical average of 30.5 percent. Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 4.3 percentage points to 25.0 percent. The decline puts pessimism below its historical average of 30.5 percent for the 13th consecutive week and the 15th out of the past 17 weeks.
The current streak of above-average optimism is the longest since October 13, 2011, through March 29, 2012, when bullish sentiment was above average for 20 out of 25 weeks.