LIVE MARKETS-Individual investor bulls battered, bears boast - AAII

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INDIVIDUAL INVESTOR BULLS BATTERED, BEARS BOAST - AAII

Optimism among individual investors over the short-term outlook for U.S. stocks declined in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both pessimism and neutral sentiment gained.

Meanwhile, in terms of the type of stocks investors surveyed are favoring right now, small caps are still not getting much love.

AAII reported that bullish sentiment, or expectations that stock prices will rise over the next six months, slid 5.0 percentage points to 29.9% (lowest since 29.45% on May 7). Bullish sentiment is below its historical average of 37.5% for the third time in seven weeks.

Bearish sentiment, or expectations that stock prices will fall over the next six months, added 2.9 percentage points to 46.2% (highest since 51.53% on May 7). Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 37th time in 39 weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, rose 2.1 percentage points to 24.0%. Neutral sentiment is below its historical average of 31.5% for the 56th time in 58 weeks.

With these changes, the bull-bear spread declined 7.9 percentage points to –16.3% from -8.4% last week (most negative since May 7). The bull-bear spread is "unusually low" and is below its historical average of 6.5% for the 26th time in 28 weeks.

In this week's special question AAII asked its members what type of stocks they are favoring right now.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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