A Rare AAII Investor Sentiment Survey Event

Data released today by the AAII sentiment survey showed that Bullish sentiment dropped below 18% and Neutral sentiment rose over 50%. This is a rare event with only 4 occurrences since the inception of the AAII dataset which stretches back to 1987. It is an interesting event which is forcasting a higher S&P500 6 and 12 months later with an average gain of 11.27 and 24.52%. 

On the shorter time frame, the 2 week time period is forcasting an average gain of 2% and forcasting an average gain of 2.84% 1 month later.

Methodology: 

Weeks In Sample: 1505

AAII Bullish Sentiment <18% When Neutral Sentiment >50% 

Number of occurrences since 1987: 4

Beginning date of dataset: 19870626

Filter: 2 week duplicate entries

AAII Bullish Sentiment <18% When Neutral Sentiment >50% 

Studied independently of each other when AAII bullish sentiment drops below 18%, an event that has occurred 15 times since 1987. It usually bodes well for the market looking beyond 2 months with a win rate of 85%+ a solid edge versus random odds. 

Bullish Sentiment <18%

Additionally when AAII Neutral sentiment rises over 50%, an event that has occurred 27 times since 1987. It usually bodes well for the market looking beyond 2 months with a win rate of 77%+.

Neutral Sentiment >50%

A Rare Occurrence - Bullish Sentiment Below 18% and Neutral Over 50%