AAII Highest number of NEUTRAL votes in 2 years

The AAII bullish ratio is 58%.
Bullish: 35.86% Neutral: 37.93% Bearish: 26.21%

But are more in neutral than bulls or bears.
37.93% is the highest I see in the last 2 years.

Someday somebody will tell be if that has any significance.
It's above my pay grade to figure it out myself.

Last week also had neutral higher than bulls or bears, and more this week.
Bullish: 34.90% Neutral: 35.57% Bearish: 29.53%

My hypothesis would be that it might indicate the potential for choppiness or volatility.

Edited by Rogerdodger, 04 March 2010 - 11:50 AM.

Choppiness maybe, but it does not portend volatility. Suggests the decreasing interest in the market. Do you hear people bragging about their 401ks anymore? When was the last time anyone you knew struck up a conversation about "the market" other than to bemoan it somehow. More inertia means less volatility. Less volatility less fun for traders. Look at the VIX. Fits with the "neutral" numbers in AAII.

Yes, its possible that there is a collective conscious wake up call and everyone plows back into the markets for one more bull stampede. Possible. Maybe. I don't know.... (i doubt it?)
mm

Just my take, but I would think neutrals are mostly bulls expecting a correction. If correct, then you could add the bears and neutrals to get an idea of how many participants are looking downward for immediate price movement rather than upward. If so, that number is quite bullish for the market. It makes me very uncomfortable, btw, because I'm, at this moment, one of the bulls expecting a short term correction, and as we know, the market RELISHES confounding the majority of which I'm uncomfortably a member.

Hey Roge - High Nuetral percentage simply signifies an imminent turning point. By itself, there's no directional connotation. However, put this in the context of the current uptrend, it's bullish. Here are the recent dates where the AAII neutral % came near or above the 30% level: 02-04-2009 31.3% 04-22-2009 29.6% 12-16-2009 29.5% 01-20-2010 34.7% 02-24-2010 35.6% Edit: You know, like in High Noon, they're just waiting for the train to arrive to set things in motion...

Edited by TechMan, 04 March 2010 - 07:30 PM.

Hey Roge - High Nuetral percentage simply signifies an imminent turning point. By itself, there's no directional connotation. However, put this in the context of the current uptrend, it's bullish.

Here are the recent dates where the AAII neutral % came near or above the 30% level:

02-04-2009 31.3%
04-22-2009 29.6%
12-16-2009 29.5%
01-20-2010 34.7%
02-24-2010 35.6%

Edit: You know, like in High Noon, they're just waiting for the train to arrive to set things in motion...

Try as I may- I don't see the "imminent turning points" to which you refer, Tech. They seem to come in up trends and down trends alike, but not at tops or bottoms. Unless, of course, we do the "Bradley tap dance" and turn every day into a CIT. But I might be missing or misunderstanding your point here....Regards, D

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=2&dy=0&i=p74356623488&a=173216392&r=5687.png

Edited by IYB, 04 March 2010 - 08:17 PM.

I probably should’ve taken a little more time explaining it better… If the market’s range bound, and the AAII survey came out with 30% neutral, it’s very likely it would break out of that range (up or down depending on the existing trend) in the following week. And, that’s what had happened in the week(s) following these 2009 dates: Dec. 16, Apr. 22, and Feb. 4. Although the market was a lot more volatile around Feb. 4, 2009, that was still in a box for a good 3-4 weeks. If the market just had a sharp selloff or advance, the high AAII neutral signifies the likelihood that the selloff or the rally would stall in the following week(s). A good example would be the week of 1-20-2010. That had halted 3 prior straight sessions of selloff right in its tracks, and turned the market into a range. So, perhaps for the lack of a better term, it’s the inception point, psychologically and therefore technically, where the probable course of the market should begin to either revert to the mean or to deviate from it. Hope that clarifies…

I probably should’ve taken a little more time explaining it better…

If the market’s range bound, and the AAII survey came out with 30% neutral, it’s very likely it would break out of that range (up or down depending on the existing trend) in the following week. And, that’s what had happened in the week(s) following these 2009 dates: Dec. 16, Apr. 22, and Feb. 4. Although the market was a lot more volatile around Feb. 4, 2009, that was still in a box for a good 3-4 weeks.

If the market just had a sharp selloff or advance, the high AAII neutral signifies the likelihood that the selloff or the rally would stall in the following week(s). A good example would be the week of 1-20-2010. That had halted 3 prior straight sessions of selloff right in its tracks, and turned the market into a range.

So, perhaps for the lack of a better term, it’s the inception point, psychologically and therefore technically, where the probable course of the market should begin to either revert to the mean or to deviate from it.

Hope that clarifies…

It does....but I'm not sure that what you described could not be said on ANY random market day without us having any knowledge of what the AAII numbers are at the time. But that's just the skeptic in me. I'm from Missouri. Not literally, but you know what I mean. Anyhow, good tradin' to ya', Tech. You've been nailing this trend for some time now. Keep it up. Best, D