Thursday, April 29, 2010

AAII Bulls Minus Bears vs DJIA Survey Data and Graph for 4/29/2010

The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months . AAII is the "American Association of Individual Investors." For the survey, Individual members of the AAII are polled on a weekly basis. Only one vote per member is accepted in each weekly voting period. The AAII reports the weekly results at http://www.aaii.com/sentimentsurvey/.
As of 04/28/2010, the AAII members are:
  • Bullish: 41.36%
  • Neutral: 30.00%
  • Bearish: 28.64%
The 52 wk MA of Weekly sentiment is about as low as it was in 1994 before the market put on a great 5 year advance. Will this repeat? Post your answer in the comments section below.

This chart shows the 52-week moving average of the AAII bull/bear index (American Association of Individual Investors). 52 weeks removes seasonality from the number and gives startling results.
 Click chart for full size image

Charts of the AAII (American Association of Individual Investors) Bulls minus Bears Index versus the market are key sentiment indicators for stock market technical analysis.  Contrarian theory states the time to buy is when fear and pessimism are at a maximum since this usually occurs near market bottoms.

More Information
Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%
As of 4/25/10, the explore portfolio was up 11.1% YTD

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3 comments:

  1. LZC4/29/2010 08:34:00 AM

    The overall effect from 1999 to 2010 looks like consolidation.

    ReplyDelete
  2. Mark4/29/2010 08:38:00 AM

    I still probably only have 30% of my portfolio invested in the market, because I am afraid of all the taxes I see coming. Of course, I do take advantage of dips, and I am looking into options now too. In the early 90s, I was 90% invested. Of course, I was also a lot younger, now I am in preservation of capital mode and also trying to grow my portfolio.

    ReplyDelete
  3. Steve Thompson4/29/2010 02:38:00 PM

    I was tempted to put some fixed into equities yesterday about one hour prior to the close the advance / decline line was more than 10 to 1 down. Closer to the close it popped above 10%, so I held my allocation. I think we have another good year ahead for equities. I’m staying the course.

    ReplyDelete