By Seeking Delta of http://seekingdelta.wordpress.com
Both the NAAIM (active money managers) and AAII (individual investors) sentiment surveys released this week show a decline in bullish sentiment. The biggest decrease in bullish sentiment came in the AAII survey where the bullish reading plummeted to 40% from 58% last week. The NAAIM survey showed a more modest pullback.
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This week, active managers have, on average, a 67% allocation to equities. This is down from 71% last week. The median allocation fell to 80% while the top quartile of active managers have an allocation of 100% or greater to equities with the bottom quartile at a 50% or less equity exposure. The eight week moving average continued its uptrend, now at 69%.
The NAAIM number measures current equity exposure (0% would be all cash, 100% fully invested). Additional detail can be found here.
Individual investor’s sentiment continued to be volatile with bullish readings over the last three weeks at 48%, 58% and 40% respectively. Bearish sentiment also increased slightly to 32.5% from last week’s reading of 28.5% which means the large decrease in bullish sentiment came almost entirely from an increase in neutral sentiment. The Bull-Bear spread is at 7.5% and the eight week moving average decrease, for the first time in 12 weeks, to 48%.
I have included a new chart this week that shows each category as a percentage of the total.
Individual investor sentiment and NAAIM sentiment are now below the “extreme” territory (measured as one standard deviation above average.