AAII Sentiment declined to Moderately Bullish, from Bullish last week -- 5% cash recommended for traders

 Data Source:

 https://www.aaii.com/sentimentsurvey/sent_results

 

NOTE:

This indicator had been bullish for 9 weeks in a row. Indicating the stock market is oversold. But unlike normal times, there has not been a rebound while the Ukraine war continues. The last time this indicator was so bullish was from May through August 2020. When I look at all seven market timing indicators, which I will update on about April 10, they turned Moderately Bearish in early February 2022, and changed to Neutral in early March 2022. Lesson: An average of seven useful indicators works better than any one stock market timing indicator.

 

This is the only short term market timing indicator I track, of the seven market timing indicators I follow, which I update in the first 10 days of every month. The  February 2022 update had declined to Moderately Bearish: 

https://el2017.blogspot.com/2022/02/economic-logic-stock-market-timing.html

And then improved to Neutral in early March 2022:

https://el2017.blogspot.com/2022/03/economic-logic-stock-market-timing.html

 

AAII Sentiment does NOT tell us if we are in a bull market or a bear market. It just tells traders if buying stocks today is a good idea for the next few weeks.  This weekly indicator can change a lot in a few weeks.   It is a contrary opinion sentiment indicator, so it is bullish when AAII individual investors are bearish, and vice versa, recommending from 0% to 100% cash in a common stock portfolio. Based on market sentiment from an anonymous online poll of members of the American Association of Individual Investors (AAII).  The four-week moving average has much less volatility than weekly data, but active stock traders should prefer the weekly data.

 

Week Ending on March 30, 2022: 

= NEUTRAL

53.7% of AAII Investors were bullish

(was 48.1% bullish = MODERATELY  BULLISH last week)

 

Four  Week  Moving  Average: 

= MODERATELY  BULLISH

41.8% of AAII Investors were bullish

(was 39.0% bullish = BULLISH last week)

 

 

Recommended Portfolio Cash

percentage for short term traders: 

 = 5%

(was 0% cash last week)

 

 

Data for the week ending 3/30/22: 

31.9% were Bullish (lowest since 1/13/16)
   (was 32.8% last week)

40.6% were Neutral 
    (was 31.7%)

27.5% were Bearish 

    (was 35.4%)

 

 

AAII  Indicator  Analysis:

    ( over 80% is Bearish )

( 71% to 80% is Moderately Bearish )

( 50% to 70% is Neutral )

( 40% to 49% is Moderately Bullish )

  ( under 40% is Bullish )