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Mixed Opinions on the Recent Rebound

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This week’s Sentiment Survey special question asked AAII members for their opinion about the recent rebound in stock prices that began in mid-February. There was no consensus. The largest group of respondents (22%) said that the rebound will not last. Several respondents in this group described the rebound as a temporary occurrence or a bear market rally. Slightly more than 14% of respondents said that the rally was a reaction to oversold conditions, excessive pessimism and short-term trading. Nearly 9% said that stock prices are tied to swings in commodity prices, especially oil. About 7% expect the stock market to remain volatile. Almost 5% of respondents expect stocks to rise more, while 4% attributed recent buying activity to the Federal Reserve and low interest rates. An additional 4% described the rebound as being normal or otherwise expected.

Here is a sampling of the responses:

  • “A bear market rally.”
  • “With oil prices bottoming, one would expect a rebound.”
  • “I expect it to drop and to continue to be up and down.”
  • “I think it was a correction of the excessively negative sentiment that prevailed just after the first of the year.”
  • “I think things will slowly improve, with periodic setbacks.”
  • “I’m surprised at the extent of the rebound and the turnaround in oil prices.”

Want to weigh in? Take the survey yourself and see results online at http://www.aaii.com/sentimentsurvey.

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