Monthly AAII Portfolio Allocation remains Neutral & Weekly AAII Stock Sentiment declined to Moderately Bearish

New Indicator remains Neutral: 

Monthly AAII Portfolio Allocation Survey

The October 2022 AAII Portfolio Allocation Survey reveals AAII investors are neutral based on their own investments. 

Old Indicator declined to Moderately Bearish

Weekly AAII Stock Market Sentiment Survey

This week's AAII Sentiment was Moderately Bearish with only 32.9% bears.

MONTHLY  PORTFOLIO  ALLOCATION  SURVEY

The actual portfolios of these AAII investors in October 2022 had 61.6% stocks and stock mutual funds, which I rate as Neutral. September 2022 was 63.4%. The historical average is 61.5%. Based on the percentage of stocks claimed in their portfolios, AAII investors are nowhere near their bearish sentiment at market bottoms in the past -- with roughly 40% allocated to stocks at the 1990, 2002, and 2009 stock market lows.  Far below the current 61.6%.

WEEKLY  AAII  INVESTOR  SENTIMENT  SURVEY

Very bearish for AAII Sentiment means 55% or more AAII investors are bearish on the stock market. 

Very bullish for AAII Sentiment means 30% or less bearish.

The AAII investor Sentiment Survey had been very bearish on the stock market for two weeks, with 55.9% bears and 56.2% bears. So I was very bullish for those two weeks, using this as a contrary indicator.  And stock market averages went up a lot in those two weeks. Last week's AAII Sentiment was not that bearish, at 45.7%, interpreted as Neutral on the stock market.  

I decided to use the monthly AAII Portfolio Allocation Survey, instead of the weekly AAII Stock Market Sentiment survey, as one of my seven EL Stock Market Timing Indicators index.

I'll keep tracking weekly AAII Sentiment this year to see if it works with a different interpretation of the data. I will be bullish only when I see an unusually large percentage of bearish AAII investors, as a contrary opinion. The buy signal will last for one-week, because weekly data can be very volatile. My prior interpretation of the sentiment data, since 2005, used a four-week average of the percentage of bullish investors. That interpretation stopped working in 2022 -- it had been bullish all year.

Sources of data:

September AAII Asset Allocation Survey: Equity Exposure Modestly Declines | AAII

...... Economic Logic: AAII Sentiment -- another way to look at AAII data (el2017.blogspot.com)

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

NOTE: My SEVEN  STOCK  MARKET  TIMING  INDICATORS were:

BEARISH on September 30, 2022

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

BEARISH on August 21, 2022

...... Economic Logic: The ECONOMIC LOGIC stock market timing indicators remain Bearish at -4 1/2 (range from -7 to +7) (el2017.blogspot.com)

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)

 

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

Data for the week ending 11/2/22: 

30.6% were Bullish  --  (under 20% is unusually low)
   (was 26.6% last week)

36.5% were Neutral
    (was 27.1%)

32.9% were Bearish  --  (over 55% is unusually high)

    (was 45.7%)

 DATA  NO  LONGER  USED  FOR  MARKET  TIMING:

Week Ending on November 2, 2022: 

= MODERATELY  BULLISH

48.2% of AAII Investors were bullish 

(was 36.3% bullish =  BULLISH last week) 

 

Four  Week  Moving  Average: 

= BULLISH

35.0% of AAII Investors were bullish (unusually low)

(was 30.5% bullish = BULLISH last week)

 

 

Recommended Portfolio Cash

percentage for short term traders: 

 = 0%

(was 0% cash last week)

 

 

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