Few believe that the market will be materially higher within the next 6 months. Our suspicions were confirmed by a recent poll by Prieur du Plessis of 615 people who follow his blog on SeekingAlpha.com. In essence, the poll set out to determine readers’ views about the direction of the stock market over the next few months. More specifically the poll asked about the level of the S&P 500 Index (893 at the time of the poll last week) by the end of September 2009 and December 2009 respectively.
A total of 615 people participated in the September poll and 511 in the December poll, answering as shown in the tables below:
The S&P 500 improved on the first three days of the poll, but declined marginally on the last day, leaving the Index 2.9% higher over the voting period. The poll results indicate quite negative investor sentiment. As far as the three-month period to September 30 is concerned, 71.9% of the readers see the S&P 500 declining, while a majority (55.1%) also see the Index down by the end of the year.
Equity markets follow the path of least resistance. This poll suggests that the path of least resistance is up because too many punters have positioned themselves for equity market weakness.
The bearish poll results are confirmed by last week’s survey by the American Association of Individual Investors (AAII), indicating 48% of investors were bearish while 28% were bullish. As reported by Bespoke, the bull-bear spread of -20.8% was the lowest level since the week ended March 12.
Source: Bespoke, June 25, 2009.
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