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AAII Sentiment Survey: Bearish Sentiment Continues to Rise

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Movers and Shakers wrote a column · Dec 16, 2022 09:02
Pessimism among individual investors about the short-term direction of the stock market rose to a five-week high in the latest AAII Sentiment Survey. Neutral sentiment fell, while optimism remained at an unusually low level.
AAII Sentiment Survey: Bearish Sentiment Continues to Rise
Sentiment
Bullish sentiment : 24.3%, up 0.4 points
- Expectations that stock prices will rise over the next six months, fell 0.4 percentage points to 24.3%.
- Bullish sentiment remains below its historical average of 37.5% for the 50th consecutive week. It is at an unusually low level for the third consecutive week.
Neutral sentiment: 31.1%, up 2.4 points
- Expectations that stock prices will stay essentially unchanged over the next six months, decreased by 2.4 percentage points to 31.1%. The decline puts neutral sentiment below its historical average of 31.5% after two consecutive weeks of being above average.
Bearish sentiment: 44.6%, down 2.8 points
- Expectations that stock prices will fall over the next six months, jumped 2.8 percentage points to 44.6%.
- Pessimism is above its historical average of 31.0% for the 53rd time out of the past 56 weeks. It is at an unusually high level for the second consecutive week.
AAII Sentiment Survey: Bearish Sentiment Continues to Rise
The bull-bear spread - The spread (bullish minus bearish sentiment) is –20.3%. This is well below the historical average of 6.7% and is unusually low.
Historically, the S&P 500 index has gone on to realize above-average and above-median returns during the six- and 12-month periods following unusually low readings for bullish sentiment and the bull-bear spread. Unusually high bearish sentiment readings historically have also been followed by above-average and above-median six-month returns in the S&P 500.
Concerns about the economy, inflation, corporate earnings and volatility in the stock market continue to cause many individual investors to maintain a cautious short-term outlook. The majority of this week's responses were recorded prior to yesterday's rate hike announcement by the Federal Reserve.
Source: American Association of Individual Investors
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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