AAII Sentiment Survey, 1/22/25

yogibearbull

AAII Sentiment Survey, 1/22/25

BULLISH became the top sentiment (43.4%, above average) & neutral became the bottom sentiment (27.1%, below average); bearish became the middle sentiment (29.4%, below average); Bull-Bear Spread was +14.0% (reversal; above average). Investor concerns: Budget, debt, inflation, the Fed, dollar, geopolitical, Russia-Ukraine (152+ weeks), Israel-Hamas (67+ weeks; cease fire). For the Survey week (Th-Wed), stocks up (rally resumed), bonds up, oil down, gold up, dollar down. NYSE %Above 50-dMA 50.24% (positive, barely). FOMC 1/29/25 #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/post/1854/thread

Mark

Honestly I was expecting a more cautionary mood.

bee

I came across this "sentiment" indicator (1/23/25) with respect to NYSE A-D Line showing signs of YTD divergence.



From the link:

The reason why analysts pay so much attention to breadth indicators like the A-D Line is that most times they will do whatever prices do, but sometimes they give a different answer. And that difference can be important. Big-cap price indices like the SP500 are dominated by a handful of large issues, where as the A-D Line is more egalitarian. Every issue gets an equal vote.

When liquidity starts to become a problem, it tends to affect the smaller and weaker issues first, before eventually coming around to bite the rest of the market. So watching to see what all of the issues are doing as opposed to the currently fashionable large stocks can tell us about the health of the liquidity stream. That is why the NYSE's A-D Line is one of my favorite indicators, to get that message about liquidity.

The author continues, this signal doesn't work well with the NADAQ A-D Line:

I recommend that people do not follow the Nasdaq's A-D Line, because it has an inherent negative bias. It has never once made a new all-time high, and tends to drift lower because of the easier listing standards on the Nasdaq. If a company is going to IPO then go broke, it is more likely to do that on the Nasdaq, and it will contribute to the Declines column every day it goes down from its IPO price to zero. This makes the Nasdaq's A-D Line unreliable as an indicator, and it is currently close to making a new all-time low. It does that a lot.

But the NYSE's A-D Line has worked well for decades, and it still appears to be working well. Right now, it is giving us a bearish warning message. The market is not necessarily obligated to comply with that message, and the bearish message could go away if breadth numbers suddenly start coming in stronger. But for now it is a big warning of trouble.

https://mcoscillator.com/learning_center/weekly_chart/nyse_a-d_line_divergence/