Survey Results For Frame Ended 24 June 2015

The AAII Investor Sentiment Survey measures the percentage of individual investors who are , , and on the market for the next 6 months; individuals are polled from the ranks of the AAII membership weekly. Just 1 vote per member is accepted in each weekly voting frame.

Data represents what direction members feel the stock market will be in the next 6 months

Bullish: 35.6%, up 10.1

Neutral: 42.8%, up 2.5

Bearish: 21.7%, down 12.6

Change from last week

Bullish: +10.1
Neutral: +2.5
Bearish: -12.6

Long-Term Average:
Bullish: 38.83%
Neutral: 30.89%
Bearish: 30.28%

Commentary

Optimism rose to a 3-month high as pessimism dove to a 4-month low in the latest AAII Sentiment Survey. Neutral sentiment continues to stay at an unusually high mark.

Bullish sentiment

Expectations that stock will rise over the next 6 months, jumped 10.1 percentage points to 35.6%. Optimism was last higher on 26 March 2015 (38.4%). Even with the big increase, Bullish sentiment remains below its of 39% for the 16th week running—the 1st such occurrence since a 20-wk streak between 5 April and 16 August 2012.

Neutral sentiment

Expectations that stock prices will stay flat to unchanged over the next 6 months, rebounded by 2.5 percentage points to 42.8%. The rise keeps Neutral sentiment above its historical average of 31.0% for the 25th week running, and at an unusually high level for a 12th straight week.

Bearish sentiment

Expectations that stock prices will fall over the next 6 months, dove 12.6 percentage points to 21.7%. The dive follows what had been a 10-month high and puts pessimism at its lowest mark since 26 February 2015 (20.3%). The historical average is 30%.

The big rebound in optimism and large decline in pessimism comes as the major indexes have bounced off of their recent lows. It also follows a period of 7 consecutive weeks with Bullish sentiment staying below 30%, the longest run since early Y 2003.

This week’s reading puts pessimism below its historical average for the 20th time this year, or 20 out of the past 26 weeks. Bearish sentiment is near the lower level of its typical range, but is not currently at an unusually low level.

This week’s special question asked AAII members what impact the 1st interest rate hike will have on stock prices. Just under 35% of respondents said it will have little to no impact, with many reasoning that the first rate hike is anticipated. A nearly equal number said there will be a short-term negative reaction, though the majority of these respondents anticipate stocks rebounding quickly. Slightly more than 19% think stocks will fall, with some anticipating a decline of 10% or more. A small group of optimists (7%) expect to stocks react positively.

By , CFA AAII

, Editor

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