Each week, we quantify the implications of the newest reading of the Investor’s Intelligence survey, in which advisors are asked to give their outlook on the equity market. One way we track and quantify this poll is subtract the bear percentage from the bull percentage and rank this number based on historical readings dating back to 1972. In other words, the bull-minus bear number is put into perspective by ranking it relative to past readings.
Currently, the bull minus bear percentage reading is relatively low, with 37% bulls and almost 28% bears, a reading of nine, which is in the 40-50 percentile. This has had bullish market implications. Per the table below, the expected S&P 500 Index (SPX) return following a reading in the 40-50 percentile is +2.54% eight weeks following a reading in this percentile, more than doubling the average 8-week return of 1.19% since 1972.