Pragmatic Capitalism

Practical Views on Money & Finance


Sentiment has once again shifted rapidly in recent weeks as the bi-polar market continues its confused, drunken walk.   The Investors Intelligence Survey showed a bullish reading of 52% before the correction started, but investors have dramatically tempered their expectations as the latest reading shows just 35.6% bulls.   At the peak the bears were just 19% vs 27.8% bears today.  This bull bear ratio of 1.28 is relatively neutral in historical terms.

The AAII survey is also showing relatively neutral readings.  The most recent data showed a marginal decline versus last week.  Charles Rotblut of the AAII provides some details:

“Neutral sentiment hit a six-week high in the latest AAII Sentiment Survey. The percentage of individual investors expecting the markets to remain flat over the next six months reached 28.9%.

At the same time the spread between the bulls and the bears narrowed to less than one percentage point. Bullish sentiment registered 35.8% and bearish sentiment registered 35.2%. This is the smallest spread between those expecting stocks to rise (bulls) and those expecting stocks to fall (bears) since December 24.”

All in all sentiment has shifted back to a neutral reading as the markets stabilize.  This high volatility in sentiment is a clear sign of utter confusion on the part of market participants and creates a landscape that is ripe for dramatic moves in either direction.

Got a comment or question? Feel free to contact Cullen via email here or on Twitter here.
Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

More Posts - Website

Follow Me: