LIVE MARKETS-Individual investor bears slip, but still elevated - AAII

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INDIVIDUAL INVESTOR BEARS SLIP, BUT STILL ELEVATED - AAII

Individual investor pessimism over the short-term outlook for U.S. stocks edged down in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, optimism also dipped, while neutral sentiment rose.

Meanwhile, more than half of investors surveyed said they have become more bearish since the start of the year.

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, lost 1.3 percentage points to 55.6%. Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 21st time in 23 weeks.

Bearish sentiment has now been above 50% for nine straight weeks, which is the longest period over 50% in the survey’s history.

Bullish sentiment, or expectations that stock prices will rise over the next six months, fell 3.5 percentage points to 21.9%. Bullish sentiment is "unusually low" and is below its historical average of 37.5% for the 15th time in 17 weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, rose 4.8 percentage points to 22.5%. Neutral sentiment is "unusually low" and is below its historical average of 31.5% for the 40th time in 42 weeks.

With these changes, the bull-bear spread dipped 2.4 percentage points to –33.6% from –31.4% last week. The spread is below its historical average of 6.5% for the 16th time in 18 weeks and is below –20.0% for the ninth week in a row. This is the longest streak below –20.0% since a 12-week run between September 14 and November 30, 1990.

In this week's special question AAII asked its members how their sentiment toward stocks has changed since the start of the year.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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