AAII Sentiment Survey: Optimism Rebounds but Remains Low

Optimism among individual investors about the short-term direction of the stock market rebounded but remains unusually low. The latest AAII Sentiment Survey also shows lower levels of neutral and bearish sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded 3.1 percentage points to 23.3%. The drop keeps bullish sentiment below its historical average of 38.0% for the 22nd consecutive week and the 27th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 2.2 percentage points to 29.1%. This is the 28th time out of 30 weeks that neutral sentiment is below its historical average of 31.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 0.9 percentage points to 47.6%. Pessimism is above its historical average of 30.5% for the 24th consecutive week and the 26th time this year.

Bullish sentiment remains at an unusually low level for the seventh time in eight weeks. Bearish sentiment remains at an unusually high level for the 20th time out of 22 weeks. Historically, both have generally been followed by above-average and above-median returns for the S&P 500 index, though the link is stronger for unusually low optimism than it is for unusually high pessimism.

This week’s AAII Sentiment Survey:

• Bullish: 23.3%, up 3.1 percentage points
• Neutral: 29.1%, down 2.2 percentage points
• Bearish: 47.6%, down 0.9 percentage points

Historical averages:

• Bullish: 38.0%
• Neutral: 31.5%
• 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.