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AAII Sentiment Survey, 9/21/22

For the week ending on 9/21/22, Bearish remained the top sentiment (60.9%; extremely high; highest since 3/5/09) & bullish remained the bottom sentiment (17.7%; extremely low); neutral remained the middle sentiment (21.4%; low); Bull-Bear Spread was -43.2% (extremely low; lowest since 3/5/09). Investor concerns: Recession; inflation; supply-chain disruptions; the Fed (+75 hike yesterday & 100-125 bps more hikes in 2022); market volatility (VIX, VXN, MOVE); Russia-Ukraine war (partial mobilizations in Russia; 30+ weeks); geopolitical. For the Survey week (Thursday-Wednesday), stocks were down sharply, bonds down, oil down sharply, gold down, dollar up. #AAII #Sentiment #Markets


  • Outside 2020, did the bearish reading ever go this high? Only if you recall off hand.
  • edited September 2022
    I already mentioned that the Survey was the most negative since 3/5/2009 (memorable SP500 at 666 on 3/9/09). Also this week was among the 5 worst sentiments since the Survey inception in 1987.

    Being a contrarian indicator, the Survey is significant at extreme levels.
  • edited September 2022
    Interesting. It was 3/8 or 3/9 2009 that the terrible bear market ended. A Monday or Tuesday as I recall. The 5th (lowest sentiment reading) was probably the Friday before. I phoned Oakmark and D&C on Friday to get instructions for Roth conversions. (Had run out of dry powder. New approach needed.) Completed the paperwork over the weekend. Mailed them both “next day delivery” on Monday. Missed the bottom by 1 day …

    Oh shucks!
  • edited September 2022
    Today was a lot nastier than the index numbers reveal. My GNMA fund fell over 1%. Rare. Banks continued to get slaughtered. Many down over 30% YTD. Due to both the inverted curve plus fed’s (regulators) making noise about higher capital reserve requirements for large regionals.

    Egads! (my “sentiment” reading)

    Added - As of yesterday TRP’s conservative allocation fund PRSIX was off -14.37% YTD. Can’t imagine today helped it any. (Off a cool 15% YTD after Thursday)
  • Also from Twitter and Carson Investment Research on the prior four occasions the S@P was up an average 19.1% and 33.2% six and twelve months later. I am finding Twitter is filled with great research by some fabled analysts with decades of experience. But not sure of its value in the real world. Lots of curve fitted data mining there. Time will tell if this latest signal proves anywhere near as profitable as in the past. Heaven knows that since the June lows there have been an abundance of indicators saying the next six and twelve months will see outsized gains.
  • Twitter does have some good charts and data buried among lots of noise.
  • edited September 2022
    By next Tues weds if have couple rallies for couple trading days where 90% of stocks positives by days ends, sale offs maybe subsidizing/hopeful for bottom consolidation

    Sp500 shows oversold conditions but multiple support levels were passed

    We maybe early to parteee though. Lots Wall Street experts say at least 5 -9 more months of pain / sp500 > 20s% leg down and severe lasting 1.5-2.5 yrs recession.

    Large corps/FAANG starting laid offs and lots folks in real estates /commercial are hurting, housing sales down for 7 months now. Feel like 2009 all over again.

    Buffet once stated *nobody know nothing* he is extremely right
  • edited September 2022
    What’s either encouraging - or scary - depending how you view it, is that virtually every asset class is in free fall. Oil’s in the 80s, down from north of $100. Gold’s under $1700, which is about as low as it’s been in 3 or 4 years. Bonds of course stink, unless you go very short term where rates have risen. Stocks of every stripe falling. When a fund like VWINX drops nearly a percent in a single day you know you’ve got problems. No secret why this is happening. Interest rates have soared. I suspect market forces in the face of 8% inflation are more responsible for the rate increases than the Fed’s words or actions. They take the credit. Market forces force their hand.

    I’m not optimistic. However, I’d rather go down owning equities than churning out a few % in short term bonds. And there’s always the chance I’m overly pessimistic and at least some risk asset classes (gold, nat. resources, foreign stocks, etc.) will stage a rally. Wouldn’t take a lot to tilt the table in a diversified investor’s favor. A real interesting fund ro watch is AOK. Been beaten silly this year. It will rise again from the dead. But, when?
  • Dam the torpedoes , full speed ahead !! I'm just trying to hold the fort until the Calvary arrives.
    To each his own, Derf
  • Sometimes, extreme Bearish sentiment is a contra-indicator. And sometimes its really not. That's why I had stopped looking at these sentiment surveys.

    Perhaps this indicator works better during Bull markets? I wonder if there are stats on this.
  • edited September 2022
    Derf said:

    ”Dam the torpedoes , full speed ahead!!”

    Aye aye @Derf / We’ve scuttled most of the cargo, thrown the oars into the boiler and getting ready to fire the lifeboats too! Full speed ahead!
  • @Derf- quite an unusual battle, it would seem. Are the torpedoes heading for the fort, or for the cavalry?
  • @Old_Joe : You're right about the battle . to be a dipper at these prices or get a few bucks interest in CD's or T's !
  • This is old news I'm sure but Union Admiral Farragut uttered the phrase during his attack on Mobile Bay in 1864. During the Civil War torpedoes referred to floating stationary mines.
  • Sure, but even floating mines didn't generally engage with the horse cavalry. :)
  • "to be a dipper at these prices or get a few bucks interest"

    @Derf- seems to me that once an avalanche starts rolling it's best to stay out of the way until it reaches the bottom.
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