The AAII sentiment survey deserves some attention since it can be a very useful guide. When using the AAII indicator it is not necessarily a matter of whether bulls or bears are totally right or wrong. Results can be mixed. The key is to review how far the two groups opinions separate from one another over time. When both opinions move to extremes, a change in direction should be near. The following charts provide an illustration of how opinions can vary. When they do not move to extremes, additional information is needed to determine the direction of markets.
Note that this information is for educational purposes only and not a recommendation.
Stock charts courtesy of StockCharts.com.
