AAII Sentiment Survey

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AAII Sentiment Survey 4/28/11

Bullish sentiment rebounded 5.7 percentage points to 37.9% in the latest AAII Sentiment Survey. Optimism that stock prices will rise over the next six months remained below its historical average of 39% for the second consecutive week.

Neutral sentiment, expectations that stock prices will remain essentially flat over the next six months, fell 5.4 percentage points to 31.5%. The decline brought neutral sentiment close to its historical average of 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 0.3 percentage points to 30.6%. Even with the small drop, bearish sentiment has been essentially unchanged during four out of the last five weeks. The historical average is 30%.

Individual investors continue to be cautiously optimistic. Better-than-forecast earnings and rising stock prices are keeping many optimistic, while inflationary pressures and the uneven pace of the economic recovery remain a concern.

This week’s special question asked AAII members whether they thought the stock market is fairly valued, undervalued or overvalued. The majority of the respondents were split between describing stocks as being fairly valued and overvalued. A notable minority thought stocks were undervalued.

According to this survey, my 2 cents is that market will go more higher even there will be a pullback during next 1-2 weeks.