Bullish Sentiment Near 2-1/2 Year High

Seeking Alpha ^ | 10-29-2010 | Charles Rotblut, CFA

[blam]

Bullish Sentiment Near 2-1/2 Year High

by: AAII
October 28, 2010

Optimism among individual investors reached its highest level in nearly two and one-half years, according to the latest AAII Sentiment Survey. Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.6 percentage points to 51.2%. The historical average is 39%.

Neutral sentiment, expectations that stock prices will stay essentially flat over the next six months, rose 2.0 percentage points to 27.2%. This is the highest neutral sentiment has been in five weeks. The historical average is 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 3.6 percentage points to 21.6%. This is the lowest level of pessimism since January 12, 2006. The historical average is 30%.

With bullish sentiment at its highest level since May 8, 2008 and bearish sentiment at its lowest level since January 12, 2006, the question becomes whether either reading is excessive. The answer is no. Bullish sentiment is just slightly above one standard deviation from the historical average and bearish sentiment is within one standard deviation.
In other words, if we were to plot all of the readings since the survey began in 1987, neither this week's bullish nor bearish sentiment reading would stand out as an outlier.

As for the reason why bullish sentiment continues to improve, investors are becoming more confident that a bottom in the market has been established. Nonetheless, many individual investors continue to have concerns about the economy, interest rates and the federal deficit.

This week's special question asked AAII members what sectors and industries they like right now. Technology was named by the largest number of respondents, followed by commodities, gold, energy, finance and banks, and health care. When we asked the same question last August, the most popular sectors and industries were technology, commodities, and energy.

This week's sentiment survey results:

* Bullish: 51.2%, up 1.6 percentage points
* Neutral: 27.2%, up 2.0 percentage points
* Bearish: 21.6%, down 3.6 percentage points

Historical Averages:

* Bullish: 39%
* Neutral: 31%
* Bearish: 30%

The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat, or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online here.

[Westbrook]

I think this can be tied, at least indirectly, to the surge in conservatism, renewed faith in the free market, and the likelihood that a new Congress will keep or revive the Bush Tax cuts.

If the tax cuts pass and Barry vetoes them, I submit that his chances for reelection will be diminished considerably, even worse than his prospects are now.

The DemonRATS are stuck with the narcissistic Marxist. If they overthrow him in their primary, they lose. If they run him they lose.

The only thing they can do is distance themselves from him on the local level. But it may be too late for that after all the swooning local pols did for him in 2008-2009.

[grumpa]

But the average of 3 surveys (Concensus, AAII, and Market Vane) are still below the peak of 61 set April 16 this year and the peak of 69 set in October 2007.

[ex-Texan]

I call . . . BS . . . This is pure Bovine Squat !

Consumer Sentiment Dips to Lowest Since Last November

Must be some Wall Street Bankers want to lure in more suckers. 'One is born every minute,' you know ____ ?

And then there is this new report posted on FR just before 8 AM this morning:

http://www.freerepublic.com/focus/f-news/2617030/posts

Do not believe anything you read that originated in DC. The political class wants to ensure lots of campaign money slamming into their secret accounts. Greed drives the world and especially the world of politics . . . LOL, LOL !

[M. Espinola]

"Bullish Sentiment Near 2-1/2 Year High"

The Bankster-mega-fund-manipulated stock markets are so 'bullish'.... just as they were prior to the September 2008 crash, except this upcoming crash will be a lot more economically devastating. The Obamatrons revenge on the voters for rejecting Obamaism, however the Banksters will clean up on this pre-planned crash, as well.

Anyone putz still 'investing in stocks for the long term', penny for penny, ignoring the massive mounting national debt, and not at least trading put/call options, deserves what's coming, 100%.

[bert]

For the group, has any one spent any time on the site wikiinvest? www.wikiinvest.com
They seem to offer some interesting capabilities but ask for information I’m a little reluctant to provide. The initial contact came via a Forbes e mail and the site seems legitimate.

Of particular interest is a portfolio graphing capability that graphs the entire portfolio every day.

[blam]

I know nothing about them.