Investors' Bearish Sentiment Increases

In the investor sentiment survey reported today by the American Association of Individual Investors, individual investor bearish sentiment increased to 54.65% versus last week's reading of 44.59%.

The average bearishness level going back to July 1987 is 30% with a standard deviation of 10%; therefore, this week's bearishness reading is over 2 S.D. from its average. As a result of this increased bearishness, the bull/bear spread came in at -27%. During the first week of March, the bearishness reading was as high as 70.27% and the bull/bear spread equaled -51%.

Comments

[Brad Castro:]

LOL - based on the response to your article yesterday (seekingalpha.com/artic...), I'd tend to agree that bearish sentiment is increasing.

I will say that it's amazing how sentiment can turn on a dime in Talking Head Land on CNBC and such.

Jul 10 08:58 AM

[YoYoMama:]

Since popular sentiment on this board is to read AAII sentiment as a contrarian indicator, I guess it's a great time to buy.

Or are the bears going to finally agree with AAII?

Just curious.

Jul 10 09:01 AM

[Prudent Man...:]

The bearishness is spreading to the non-investing public which is important for new money to replace that which has been lost.

To answer the previous writer: Were GM, AIG, etc. contrary indicators? This term is used by many who do not have a clue as to its history and meaning. If one is using it to justify holding their loses that speaks for itself.

Jul 10 10:20 AM

[AndrewBaker:]

For bearishness read reality check: the only things going up these past two months have been balloons filled with the hot air of political, industry and media commentators hyping up on green shoots. If we had only a fraction of those we've been told about, we'd have replaced the lost Brazilian rain forests twice over by now!

We're in for the long haul, and false reports of things getting better will only make it last longer and be far worse than it need be. If commentators of whatever creed were paid by results as effectively those of us who work are, there would be a lot more out of work and a lot less commentary.

Jul 10 10:59 AM

[Thomas MacLeod:]

Interesting that the bears have been quick to come out after just 7% downside in the s&p! Only 30 pct of stocks on the NYSE are trading abouve their 50 day moving average. Another 3pct drop in the spy would push this to 20pct! Time to start buying again!

Jul 10 10:58 PM