AAII Sentiment remains Moderately Bullish, with 12% cash recommended for traders

  Data Source:

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

 

My SEVEN  STOCK  MARKET  TIMING  INDICATORS were:

BEARISH on July 15, 2022

...... Economic Logic: The ECONOMIC LOGIC stock market timing indicators remain Bearish at -4 (range from -7 to +7) (el2017.blogspot.com)

 

BEARISH on June 12, 2022

https://el2017.blogspot.com/2022/06/the-economic-logic-stock-market-timing.html

 

BEARISH on May 1, 2022

https://el2017.blogspot.com/2022/05/as-i-warned-on-april-17-economic-logic.html

 

MODERATELY  BEARISH on April 17, 2022:

https://el2017.blogspot.com/2022/04/economic-logic-stock-market-timing.html

 

NEUTRAL on March 11, 2022:

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

 

MODERATELY  BEARISH on February 8, 2022:

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

 

My average of seven market timing indicators, predicting stock prices over the next 3 to 6 months, is more useful than this single short term sentiment indicator.

Indicator  Analysis:

AAII Sentiment is a contrary opinion indicator of small investor market sentiment. When these less sophisticated investors get unusually bullish, it's time for traders to sell.  When very few are bullish, it's time for traders to buy. ... This is the only short term market timing indicator of the seven market timing indicators I follow.

This short term AAII Sentiment indicator 4 week average has been bullish or moderately bullish for 28 weeks in a row, as interpreted based on past experience, But unlike in past years, there was no market rebound for a long time, until after readings of an unusually low 25% bullish (very bullish as a contrary opinion) for the week ending June 15, 2022, and even lower at 23.5% bullish for the week ending 6/22/22. 

With this indicator, you can look back after a year is over, and see that the lowest AAII bullish levels were good buying points for traders, and the highest AAII bullish levels were good selling points for traders. But the bullish percentage of investors in 2022 reached deceptive LOWER troughs than in the past 16 years, making the indicator hard to interpret.

 

AAII Sentiment does NOT tell us if we are in a bull or bear market. 

It only tells us if stocks are "overbought" or "oversold".  

It only tells us if buying stocks today is a good idea for the next few weeks. 

AAII Sentiment 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. It is based on my interpretation of 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 August 17, 2022: 

= MODERATELY  BULLISH

47.2% of AAII Investors were bullish 

(was 46.7% bullish = MODERATELY  BULLISH last week) 

 

Four  Week  Moving  Average: 

= MODERATELY   BULLISH

44.7% of AAII Investors were bullish (unusually low)

(was 43.2% bullish = BULLISH last week)

 

 

Recommended Portfolio Cash

percentage for short term traders: 

 = 12%

(was 8% cash last week)

 

 

Data for the week ending 8/17/22: 

33.3% were Bullish (under 20% is unusually low)
   (was 32.2% last week)

29.5% were Neutral
    (was 31.2%)

37.2% were Bearish (over 50% is unusually high)

    (was 36.7%)

 

 

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