LIVE MARKETS-Individual investor bulls make a leap - AAII

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INDIVIDUAL INVESTOR BULLS MAKE A LEAP - AAII

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

Meanwhile, more than half of investors surveyed said that their "own analysis and judgment" most influences their stock market sentiment.

AAII reported that bullish sentiment, or expectations that stock prices will rise over the next six months, surged 8.5 percentage points to 29.4%. Bullish sentiment is below its historical average of 37.5% for the 17th time in 19 weeks.

Bearish sentiment, or expectations that stock prices will fall over the next six months, slid 7.8 percentage points to 51.5%. Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 23rd time in 25 weeks.

Additionally, bearish sentiment has now been above 50% for 11-straight weeks, the longest period over 50% in the survey’s history.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, edged lower by 0.7 of a percentage point to 19.0%. Neutral sentiment is "unusually low" and is below its historical average of 31.5% for the 42nd time in 44 weeks.

With these changes, the bull-bear spread leapt 16.3 percentage points to –22.1% from around –38.4% last week. The spread is below its historical average of 6.5% for the 18th time in 20 weeks and is below –20.0% for the 11th-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 what source most influences their stock market sentiment.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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