Thursday, July 23, 2015

Neutral Sentiment Investors Are More Bearish Than Bullish this Week

An interesting facet of the American Associations of Individual Investors Sentiment Survey has been the recent long streak of an above 40% reading for the neutral sentiment category. This week represents a record 16th straight week with the neutral reading above 40%. Although the neutral reading remains high, this week it did fall from last week's 45.95% to 41.87%. More of these neutral investors have now become more bearish as the bearish sentiment reading increased 2.36 percentage points to 25.60%, whereas the bullish sentiment reading increased a lesser 1.73 percentage points to 32.54%.

As the below chart shows, bullish sentiments remains at a relatively low level, near 1 standard deviation below its long run average. Additionally, the second chart below shows the 8-period moving average of the bullish sentiment reading and it remains near its lowest level since the end of the financial crisis six years ago.

From The Blog of HORAN Capital Advisors

From The Blog of HORAN Capital Advisors
Data source for charts: AAII

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