Research Excerpts

What Do Bullish Individual Investors Portend For The US Stock Market?

Posted on: Thursday, July 28th, 2011

The following (green highlights) is a chart and a brief excerpt from our July Sentiment Survey report.

Sentiment Survey is a monthly report that displays and analyzes a broad list of both asset flow- and survey-based measures of both professional and retail investor sentiment, and discusses their directional implications for the major areas of the US financial markets including US Stocks and Sectors, US interest rates, the US Dollar, and economically-influential commodities like crude oil, copper and gold.

excerpted from Sentiment Survey
July 27th, 2011
The US Stock Market

Chart 4 measures investor sentiment according to a weekly survey of individual investors via the American Association of Individual Investors (AAII) Bull Ratio, which is plotted by the blue line in the lower panel.  A daily bar chart of the S&P 500 appears in the upper panel.

 S&P 500 Index & AAII Bull Ratio

The colored highlights in the lower panel define most bullish (red) and least bullish (green) extremes in this survey since 2006.  The corresponding red vertical highlights between both panels show that the blue line in the lower panel is just starting to back away from a previous most bullish extreme that had previously coincided with or led into many of the most important peaks in the US stock market in recent history.


This is one of 16 charts that are displayed and discussed in today’s report.

First investor assets move, then asset prices move, then the financial press tells you why they moved — after the fact.

Investor sentiment data are an important part of our analytical process because they indicate when assets are moving, and to what areas of the US financial markets.  This helps us to get in front of an emerging price trend rather than to chase it.

Asbury Research subscribers can view the entire report by logging into our Research Center via the button at the upper right corner of the screen.

Professional investors can learn more about our investment research right here on our website which includes sample reports, client testimonials, our 2010 market calls, and John Kosar’s recent appearances in the media.

You can contact us directly for additional information online or by calling 224-569-4112.