Tags: AAII | sentiment | indicator | week

AAII Sentiment Survey Reverses Course

By    |   Tuesday, 20 May 2014 08:08 AM

The sentiment indicators continue to confound me, as they are still behaving oddly and heading in opposite directions.

The AAII Sentiment Survey from last week showed that the bullish percentage increased from 28.8 percent to 33.1 percent, while the bearish percentage dropped from 28.7 percent to 22.6 percent. This put the ratio at 1.46, which is the highest the ratio has been in the last two months.

As I have said before, the week-to-week readings on the AAII can vacillate greatly and thus is the reason I prefer to look at the four-week moving average. With the jump in the weekly reading last week, the four-week moving average rose to 1.20.

The moving average had hit its lowest reading (bearish extreme) since last September before the jump last week.

In the meantime, the CBOE Volatility Index (VIX) hit a low of 11.88 last week (bullish extreme), the lowest reading since the first week of the year.

As these two indicators are at opposite ends of the sentiment spectrum, the S&P 500 snapped its streak of alternating between weekly gains and weekly losses.

The streak reached 10 weeks before being snapped. I looked all the way back to 1950 when the index was started, and there have been two instances where such a streak reached 11 weeks and three times that it reached 10 weeks.

Unfortunately there wasn't a pattern to what happened following the alternating streaks.

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Pendergraft
The sentiment indicators continue to confound me, as they are still behaving oddly and heading in opposite directions.
AAII, sentiment, indicator, week
236
2014-08-20
Tuesday, 20 May 2014 08:08 AM
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