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AAII Sentiment Survey, 12/20/23

yogibearbullyogibearbull
in Other Investing
AAII Sentiment Survey, 12/20/23

BULLISH remained the top sentiment (52.9%; high) & bearish remained the bottom sentiment (20.9%, low); neutral remained the middle sentiment (26.2%, below average); Bull-Bear Spread was +32.0% (very high). Investor concerns: Budget; inflation; economy; the Fed; dollar; crypto regulations; market volatility (VIX, VXN, MOVE); Russia-Ukraine (95+ weeks); Israel-Hamas (10+ weeks); geopolitical. For the Survey week (Th-Wed), stocks were mixed, bonds up, oil up, gold up, dollar down. DJIA reached new highs, SP500 nearly so. Oil rose on Suez-Red-Sea corridor disruption. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/post/1292/thread

Comments

  • Sven
    @yogibb, thanks for the data. You mentioned awhile back that AAII sentiment is a contrarian indicator. Do you still find that to be true today ?
  • yogibearbullyogibearbull
    @Sven, AAII Sentiment is contrarian. It is too optimistic now, and so are the other sentiment indicators (see below). This party may go on for a while - good seasonality, Holidays/New Year, etc. New highs in DJIA may be followed by new highs in SP500, then in Nasdaq Comp, then possibly in R2000.

    Sentiment isn't very effective for full ON/OFF timing. But I use it in this way: I don't sell when Sentiment is very positive, I don't buy when it is very positive.

    So, I am not buying here and have a finger on the trigger to sell a few things. I do have (and always maintain) a decent allocation to equities.

    %Above 50-dMA for NYSE 82.55% (overbought) (Wednesday's drop didn't change the big picture much)

    %Above 50-dMA for SP500 85.60% (overbought)
  • Sven
    edited December 2023
    @yogibb, thank you for sharing your insights on AII Sentiment.

    Except for small rebalancing, I have not bought or sold anything significant in last two months. In volatile periods, I tend to sit back and watch.

    Cash is building up now as CDs and T bills are maturing for next buying opportunities. Still many uncertainties going into 2024 while stocks are expensive. Hopefully skillful managers can navigate through the market better than I can. Once again, thank you.
  • hank
    edited December 2023
    Interesting guys.

    I’ve felt rightly or wrongly that Dow 37,000 (reached 2 years ago) is a decent marker of sentiment and valuation. That’s about where it still is today (I’m guessing that’s about neutral today). So, FWIW, I’m pretty much stuck in neutral - where I’ve been all year long. I recognize the Dow doesn’t represent the greater market or have any special significance. But over the years it’s been a half-decent guide for me (of euphoria vs bust). At least as good as 75% of the market prognosticators.

    Did unload BINC a few days ago and move into an IG short term (1-3 years) bond ETF. Not a market call. I expect the former will continue to perform well. Just trying to reduce overall risk profile as a decent year ends and with potential distributions in mind. It seemed as good a place as any to take a little risk off the table. (Equity exposure fell slightly from 48% down to 46% as a consequence of the move.)

    I’m structured into 10 equally weighted static segments (all but one represented by a single holding), so selling / replacing any one position is a pretty significant move, Also limits my ability to add or reduce risk incrementally. So far so good. But it’s a relatively new methodology for me.

    There are so many cross-currents regarding the financial landscape now it’s hard for me to form an opinion on the future course of the economy or stock valuations. Wars, Sino-tensions, disfunction in DC, consumer attitudes re prices, and the approaching elections. All of this has to weigh heavily on investor sentiment.
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