Adam Gault
A key gauge of bullish sentiment posted its biggest weekly drop since February 2023 on Thursday, a day after a technology-driven rout on Wall Street sent the Nasdaq Composite (COMP:IND) down nearly 4%.
Bullish sentiment according to the weekly report The AAII investor sentiment survey fell to 43.2% for the week ending July 24, compared with 52.7% in the previous update.
The survey has been conducted by the American Association of Individual Investors (AAII) since 1987, asking respondents their opinions on where the market is headed over the next six months.
“Bullish sentiment among individual investors on the near-term outlook for stocks declined in the latest AAII sentiment survey. Meanwhile, both neutral sentiment and pessimism increased,” AAII staff said in a statement. statement.
Wall Street is down 4.8% from its most recent all-time intraday high, largely due to a rotation into technology stocks.
“Bearish sentiment, i.e. expectations that stock prices will fall over the next six months, rose 8.3 percentage points to 31.7%. Bearish sentiment is above its historical average of 31.0% for the first time in seven weeks,” AAII staff noted.
Still, despite this week's drop, bullish sentiment remains above its historical average of 37.5% for the 37th time in 38 weeks, the AAII survey showed.
“The spread between bulls and bears (bullish sentiment minus bearish sentiment) narrowed 17.9 percentage points to 11.4%. The spread between bulls and bears is above its historical average of 6.5% for the 12th consecutive week,” AAII said.
The following are some exchange-traded funds that track the benchmark S&P 500 (SP500) and the Nasdaq Composite (COMP:IND): (SPY), (VOO), (IVV), (RSP), (SSO), (UPRO), (SH), (SDS), (SPXU), (QQQ), (QLD), (TQQQ), (QID), and (SQQQ).
