The Stock Market Just Did Something Never Seen Before, but History Offers a Clue About What Happens Next
The American Association of Individual Investors (AAII) conducts weekly sentiment surveys. Participants are asked a single question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral), or down (bearish)? The results are published every Thursday.Bearish sentiment has topped 50% in 11 consecutive weeks as of May 8. The stock market has never inspired such peristent pessimism at any point since the AAII began conducting surveys in 1987. The previous record was a seven-week stint during the bear market of 1990. There were also five-week stints during the Great Recession in 2008 and bear market of 2022.That puts the stock market in uncharted territory. But history offers a clue about what happens next: The S&P 500 (SNPINDEX: ^GSPC) has typically rocketed higher in the year following bearish sentiment readings above 50%. Here are the important details.Continue reading
The American Association of Individual Investors (AAII) conducts weekly sentiment surveys. Participants are asked a single question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral), or down (bearish)? The results are published every Thursday.
Bearish sentiment has topped 50% in 11 consecutive weeks as of May 8. The stock market has never inspired such peristent pessimism at any point since the AAII began conducting surveys in 1987. The previous record was a seven-week stint during the bear market of 1990. There were also five-week stints during the Great Recession in 2008 and bear market of 2022.
That puts the stock market in uncharted territory. But history offers a clue about what happens next: The S&P 500 (SNPINDEX: ^GSPC) has typically rocketed higher in the year following bearish sentiment readings above 50%. Here are the important details.
