22 MAY 2025
The AAII Bullish-Bearish indicator is a measure of investor sentiment that is derived from a regular survey by the American Association of Individual Investors (AAII).
Each week, the provider asks its members whether they feel bullish, bearish or neutral about the stock market over the next six months.
The net indicator subtracts the percentage of bearish responses from the percentage of bullish answers and is usually deemed a good contrarian indicator.
Its recent collapse is thus encouraging.
In fact, sentiment has deteriorated so much since the tariff war began that this indicator is now back to its lows of the severe 2021/22 bear well market. It is also well below its pandemic trough. This suggests investors have quickly moved to a more bearish stance which, in turn, infers a lot of the bad news is already priced in. It sets the stage for a market rebound as we head towards summer.
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