AAII Sentiment Survey: Optimism Rebounds as Neutral Sentiment Recedes

Optimism about the short-term direction of the stock market rebounded in the latest AAII Sentiment Survey as neutral sentiment receded from its recent high. Pessimism stayed within its recent range.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 5.5 percentage points to 39.0%. The rise puts optimism a bit above its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 6.7 percentage points to 39.6%. The drop follows last week’s three-year high. Even with the lower reading, neutral sentiment remains above its historical average of 31.0% for the 14th consecutive week and the 15th time in 17 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 1.2 percentage points to 21.3%. Pessimism is below its historical average of 30.5% for the seventh consecutive week and the 12th time in 13 weeks.

Above-average readings for bullish sentiment continue to be infrequent. This week’s reading was just the sixth this year to exceed the historical average of 38.5%. Meanwhile, pessimism is currently in a tight four-week range with readings fluctuating between 20.2% and 21.8%.

At current levels, all three indicators are within their typical ranges. Neutral sentiment is near its upper end while bearish sentiment is close to its lower end.

The survey period runs from Thursday through Wednesday. As such, most of this week’s votes were recorded before the Federal Open Market Committee’s (FOMC) meeting statement was released.

This week’s AAII Sentiment Survey results:

• Bullish: 39.0%, up 5.5 percentage points
• Neutral: 39.6%, down 6.7 percentage points
• Bearish: 21.3%, up 1.2 percentage points

Historical averages:

• Bullish: 38.5%
• Neutral: 31.0%
• Bearish: 30.5%

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/sentimentsurvey.

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See more Sentiment Survey results.