After the volatility this week in the equity markets, I wanted to update one of the many indicators that we follow:
This week:
Bullish: 35.4%, down 6.4 points
Neutral:33.7%, up 3.7 points
Bearish: 30.9%, up 2.7 points
Historical Long Term Averages:
Bullish: 39.0%
Neutral: 30.5%
Bearish: 30.5%
(Source: AAII)
One of the many indicators that we follow:
This week:
Bullish: 51.9%, up 5.8 points
Neutral: 28.8%, down 1.4 points
Bearish: 19.2%, down 4.4 points
Historical Averages:
Bullish: 39.0%
Neutral: 30.5%
Bearish: 30.5%
(Source: AAII)
| The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period. | |||
Survey Results |
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| Sentiment Survey ResultsWeek ending 8/6/2014 Data represents what direction members feel the stock market will be in the next 6 months. |
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| Bullish |  30.9%down 0.2 |
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| Neutral | 30.9% down 6.9 |
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| Bearish | 38.2% up 7.1 |
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| Note: Numbers may not add up to 100% because of rounding.
Change from last week: Bullish: -0.2 Neutral: -6.9 Bearish: +7.1 Long-Term Average: Bullish: 39.0% Neutral: 30.5% (Source: AAII) |
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Markets are now at “Extreme Fear” as per the following indicator:
A monthly gauge of U.S. consumer sentiment fell in May as a gloomy view on income growth clouded an otherwise positive economic outlook, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s final May reading on the overall index on consumer sentiment came in at 81.9, down from 84.1 the month before.
It was also below the expectation of 82.5 among economists polled by Reuters. However it did show a slight increase from the preliminary reading issued on May 16.
(Source: Reuters)
| The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period. | |||
Survey Results |
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| Sentiment Survey ResultsWeek ending 5/7/2014 Data represents what direction members feel the stock market will be in the next 6 months. |
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| Bullish | 28.3% down 1.4 |
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| Neutral | 43.0% up 2.2 |
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| Bearish | 28.7% down 0.8 |
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| Note: Numbers may not add up to 100% because of rounding.
Change from last week: Bullish: -1.4 Neutral: +2.2 Bearish: -0.8 Long-Term Average: Bullish: 39.0% Neutral: 30.5% Bearish: 30.5% Here is what Jon Najarian had to say about this high 43% Neutral position:
It’s the highest level of neutrality in more than 10 years. It takes quite a bit to convince individual investors to not have an opinion about the market but that’s what the last two months have managed to do. “The market is just grinding,” says optionMONSTER’s Jon Najarian in the attached clip. “It’s been very easy to be in the wrong individual stocks.” Case in point for Najarian is Twitter (TWTR) which he started buying on the way down, defying his own discipline and incurring a loss prior to a much-needed bounce (which came in shortly after this segment was taped). “The people that can’t decide, the ‘meh’ crowd, that’s probably been the right decision.” As for the market as a whole history suggests a sharp move follows peaks in neutral sentiment. Going back to 2005 AAII neutral sentiment has pushed to 38 on 4 distinct prior occasions (August 2013, December 2011, November 2010 and December 2011). Looking at the S&P 500 (^GSPC) a month later showed greater than 4% moves each time over the subsequent 30 days. Unfortunately for traders the back-test doesn’t give a clear sign. Three of the 1-month moves were up with one sharp drop. Still it’s a safe bet that American investors aren’t going to stay neutral for long. Look for Mr. Market to knock people into the bullish or bearish camps in short order. (Source: AAII, Yahoo Finance) |
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