AAII Sentiment Survey: Pessimism Pulls Back While Optimism Rebounds

The latest AAII Sentiment Survey results show a large reversal from last week. Pessimism dropped while optimism jumped.

-Expectations that stock prices will rise over the next six months, rebounded by 8.1 percentage points to 26.1%.

-Despite recent increases, optimism remains below its historical average of 38.0% for the 43rd consecutive week.

-Bullish sentiment is also unusually low for the third consecutive week and the 26th time in 37 weeks.

-Expectations that stock prices will stay essentially unchanged over the next six months, declined 0.8 percentage points to 27.9%.

-Neutral sentiment is below its historical average of 31.5% for the 19th time in 21 weeks.

-Expectations that stock prices will fall over the next six months, pulled back by 7.3 percentage points to 46.0%.

-Bearish sentiment is above its historical average of 30.5% for the 42nd time out of the past 43 weeks and is at an unusually high level for the 27th time out of the last 35 weeks.

-The breakpoint between typical and unusually high readings is currently 40.5%.

The bull-bear spread (bullish minus bearish sentiment) is –19.9% and is unusually low for the 28th time in 34 weeks. The breakpoint between typical and unusually low readings is currently –10.9%. Approximately three-quarters of responses to this week’s survey were recorded before Tuesday’s large drop in the major indexes.