LIVE MARKETS-Individual investor bears climb - AAII

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INDIVIDUAL INVESTOR BEARS CLIMB - AAII

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

Meanwhile, about a third of investors surveyed said they are expecting market volatility to "remain about the same" over the next six months.

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, added 3.7 percentage points to 59.3%. Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 22nd time in 24 weeks.

Bearish sentiment has now been above 50% for 10 weeks in a row, the longest period over 50% in the survey’s history (going back to late-July 1987).

Bullish sentiment, or expectations that stock prices will rise over the next six months, edged down 1.0 percentage point to 20.9%. Bullish sentiment is "unusually low" and is below its historical average of 37.5% for the 16th time in 18 weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, fell 2.7 percentage points to 19.8%. Neutral sentiment is "unusually low" and is below its historical average of 31.5% for the 41st time in 43 weeks.

With these changes, the bull-bear spread fell 4.7 percentage points to –38.3% from –33.6% last week. The spread is below its historical average of 6.5% for the 17th time in 19 weeks and is below –20.0% for the 10th straight week. 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 they expect market volatility to change over the next six months.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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