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AAII sentiment improves while other surveys plummet

An Asian businesswoman plan growth and increase of positive indicators in her business

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The S&P 500 has been preventing to regain a few of its misplaced floor up to now week, working its approach out of oversold territory at Thursday’s shut within the course of. As a outcome, investor sentiment has taken a extra optimistic tone this week, because the AAII sentiment survey confirmed the share of respondents reporting as bullish climbed again above 30% for the primary time because the first week of the 12 months. In complete over the previous two weeks, bullish sentiment has now risen 11.2 share factors. While improved, that also leaves bullish sentiment a number of share factors beneath its historic common of roughly 38%.

AAII Bullish Sentiment

AAII Bullish Sentiment (Author)

The positive factors to bullish sentiment borrowed closely from an especially elevated studying in bearish sentiment. Last week, over half of the respondents reported as bearish after a ten.5 share level enhance week over week. This week, that has dropped all the best way all the way down to 41.4%. That 12.3-percentage level decline was the biggest drop since October 2019, when it fell 12.91 share factors to a a lot decrease 31%. This additionally marks the primary time bearish sentiment rose double digits then fell double digits in back-to-back weeks since February 2016.

AAII Bearish Sentiment

AAII Bearish Sentiment (Author)

In spite of the massive drop to bearish sentiment, they proceed to closely outnumber bulls with an 11-point unfold between bullish and bearish sentiment. That is improved from final week’s studying of -30.3 however stays on the low finish of the current vary.

AAII Bull-Bear Spread

AAII Bull-Bear Spread (Author)

While the AAII survey outcomes confirmed an enchancment in sentiment, different sentiment surveys confirmed the other. The Investors Intelligence survey noticed the bottom studying on bullish sentiment since February 2016 and the NAAIM Exposure index confirmed funding managers are mainly market-neutral, because the index noticed the bottom studying because the COVID crash. Combining all of those readings into our Sentiment Composite, the positive factors to AAII sentiment up to now couple of weeks has introduced the composite off the lows, however present ranges are nonetheless a number of the most bearish of the previous decade. The solely decrease readings have been within the spring of 2020 and early 2016.

Sentiment Composite

Sentiment Composite (Author)

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Editor’s Note: The abstract bullets for this text have been chosen by Seeking Alpha editors.

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