AAII Sentiment Survey: Bullish Sentiment Dips, But Still at High Levels

Bullish sentiment fell in the latest AAII Sentiment Survey, but still remains at high levels. The percentage of individual investors expecting stocks to rise over the next six months fell 11.7 percentage points to 51.6%. This is the 17th consecutive week that bullish sentiment has been above its historical average of 39%.

Neutral sentiment, expectations that stock prices will remain essentially flat over the next six months, rose 8.0 percentage points to 28.3%. This is a 14-week high for neutral sentiment. The historical average is 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 3.6 percentage points to 20.1%. This is the 14th time in the last 16 weeks that pessimism has been below its historical average of 30%.

This week’s special question asked AAII members how they thought the S&P 500 would perform in 2011. Most respondents predicted the large-cap index would rise, with the largest number of votes cast for “below average gains of +0.1% to +9.8%.”

This week’s sentiment survey results:

  • Bullish: 51.6%, down 11.7 percentage points
  • Neutral: 28.3%, up 8.0 percentage points
  • Bearish: 20.1%, up 3.6 percentage points

Historical averages:

  • Bullish: 39%
  • Neutral: 31%
  • Bearish: 30%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat, or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online at http://www.aaii.com/sentimentsurvey