Useful Market Sentiment Indicator Suggests Now is the Time to Sell: U.S. Retail Investor Uptrend Hits November 2021 High

The latest sentiment survey by the American Association of Individual Investors (AAII – namesake index also exists, Our Rem.) shows that private investors are increasingly optimistic about the stock market. The AAII Sentiment Survey has been a widely recognized survey that assesses how individual investors feel or think about the direction of the stock market.

The latest data shows that 45.2% of U.S. retail investors are optimistic about their outlook for the next 6 months, representing the highest level since November 2021.

At the same time, pessimism continued to dwindle, with only 22.7% of respondents holding a pessimistic view of the stock market outlook. This is the lowest bearish sentiment since July 2021. The last time bullish sentiment was this high was on November 11, 2021, when 48% of retail investors were optimistic on stock market performance, while only 24% were bearish. For the week, the S&P 500 traded around 4,400–4,700. However, some 6 months later, the index was down 12% to around 4,150. The last time this strong optimism was seen was on November 11, 2021, when 48% of retail investors were optimistic about the stock market, while only 24% were pessimistic. For the week, the S&P 500 traded around 4,700. However, 6 months later, the index was down 12% to around 4,150.