A Stock Market Indicator Seen Just Once Since the Great Recession Is Flashing. History Says This Will Happen Next.
Since 1987, the American Association of Individual Investors (AAII) has conducted weekly surveys to measure investor sentiment. Participants answer a simple question: Do you think stock market over the next six months will increase (bullish), stay the same (neutral), or decline (bearish)? Results are published every Thursday morning.As of March 27, bearish sentiment has topped 50% in five consecutive weeks. A reading that high in a single week is uncommon, but for bearish sentiment to exceed 50% for five straight weeks is virtually unheard of. In fact, it has only happened once since the Great Recession, ended in June 2009.The S&P 500 (SNPINDEX: ^GSPC), the best benchmark for the U.S. stock market, is currently 9% below its record high. But sentiment is often viewed as a contrarian indicator, because pessimism often precedes gains in the market. Indeed, history says the S&P 500 could rocket higher in the coming year.Continue reading
Since 1987, the American Association of Individual Investors (AAII) has conducted weekly surveys to measure investor sentiment. Participants answer a simple question: Do you think stock market over the next six months will increase (bullish), stay the same (neutral), or decline (bearish)? Results are published every Thursday morning.
As of March 27, bearish sentiment has topped 50% in five consecutive weeks. A reading that high in a single week is uncommon, but for bearish sentiment to exceed 50% for five straight weeks is virtually unheard of. In fact, it has only happened once since the Great Recession, ended in June 2009.
The S&P 500 (SNPINDEX: ^GSPC), the best benchmark for the U.S. stock market, is currently 9% below its record high. But sentiment is often viewed as a contrarian indicator, because pessimism often precedes gains in the market. Indeed, history says the S&P 500 could rocket higher in the coming year.
