AAII Sentiment Survey: Neutral Sentiment Continues Its Longest Streak
Individual investor optimism fell and pessimism rose to levels not seen since late June, according to the latest AAII Sentiment Survey. Meanwhile, neutral sentiment continued its longest streak of above-average readings since the late 1990s.
Bullish sentiment, expectations that stock prices will rise over the next six months, fell 5.0 percentage points to 34.5%. This is a seven-week low. It is the second time in three weeks that bullish sentiment is below its historical average of 39.0%.
Neutral sentiment, expectations that stock prices will stay essentially unchanged, rose 3.5 percentage points to 37.3%. This is the 12th consecutive week and the 18th out of the past 21 weeks that neutral sentiment is above its historical average of 30.5%.
Bearish sentiment, expectations that stock prices will fall over the next six months, rose 1.5 percentage points to 28.2%. This fifth consecutive weekly increase puts pessimism at a seven-week high. Nonetheless, bearish sentiment is below its historical average of 30.5% for the seventh consecutive week and the 12th time in 15 weeks.
The bull-bear spread, which is bullish sentiment minus bearish sentiment, is now at 6.3. This is narrowest reading since June 26, 2013, when the bull-bear spread was -4.9.
We have not seen neutral sentiment mostly stay above 30.5% for an extended period of time since the late 1990s. During the period of September 4, 1997 through November 4, 1999, neutral sentiment was above 30.5% for 108 out of 114 weeks.
The continued elevated levels of neutral sentiment are indicative of the cautiousness exhibited by individual investors…