Sentiment Signals: Surveys still toppish
Last week I reported on the results of the AAII Investor Sentiment Survey, showing that the bullish and bearish sentiment readings were at fairly extreme levels. Matters eased a bit over the week ended January 12, 2010, with the bulls declining to 52.3 from 55.8 in the previous week and the bears increasing to 23.4 from 18.2.
Sources: AAII Investor Sentiment Survey; Plexus Asset Management.
Wheras the AAII Survey focuses on individual investors, the Investor Intelligence Survey deals with financial newsletter writers. This survey measured sentiment over the same period as the AAII, but experienced bullish sentiment rebounding to 57.3 from 54.5% during the previous week, putting the reading slightly below the December 2007 high of 58.8%. The bears declined to 19.1% from 20.5%, registering a reading below 20 which was last seen at the market top in April 2010.
Although I do not have raw data going very far back for the Investors Intelligence series, the combined reading of the AAII and Investors Intelligence Surveys nevertheless makes for interesting reading.
Notwithstanding the above-mentioned statistics, two days ago I published a post asking the question: “Is equity sentiment really overbullish?”. I said: “Sentiment indicators from the AAII and Investors Intelligence indicate that stock market sentiment is at historically high levels and has been for a while. However, whenever I discuss stock markets with people – ranging from private investors to institutions to journalists – most of them seem to be more concerned about a looming correction in the near term than being bullish. Maybe it is just a question of communicating with different people from those participating in the surveys, but anecdotally I do not observe particularly bullish sentiment.
I then proceeded to run my own survey to try to get a feel for how the readers of Investment Postcards and The Big Picture (Barry Ritholtz’s blog) see matters. This poll runs until the end of today (Sunday) after which the results will be reported and discussed on the blog. In the meantime, you still have a few hours to cast your vote here.
More on this topic (What's this?)
AAII Investor Sentiment Survey (Stock Blog Hub, 2/10/11)
Bullish Sentiment Below 50% for Third Time in 4 Weeks – AAII Sentiment Survey (Stock Blog Hub, 2/17/11)
Sentiment Overview: Week Of March 18th, 2011 (Wall Street Sector Selector, 3/20/11)
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