Optimism Arises After Year-Long U.S. Stock Surge: Chart of Day

March 12 (Bloomberg) -- Bullishness on U.S. stocks is beginning to emerge after the market’s rally in the past year, according to a gauge derived from data compiled by the American Association of Individual Investors.

The CHART OF THE DAY displays the percentage-point gap between bulls and bears, based on 52-week averages, since 1990 among respondents in weekly surveys done by the association. The Standard & Poor’s 500 Index is also included.

This week, optimists outweighed pessimists for the first time since January 2008, three months after the previous bull market ended. The average rose to 0.64 point from minus 0.26 a week ago, thanks to an increase in the number of participants expecting higher share prices in the next six months and a decline in those anticipating losses.

Even after the gain, the barometer is near its lows in April 2003, when the previous bull market was getting started, and April 1994, when the Internet bubble was about to begin inflating. The average hit bottom at minus 1.98 and minus 2.48, respectively.

The 52-week moving average is designed to smooth out week- to-week fluctuations in the survey results. This week’s figures, for example, showed bulls rose to 45.3 percent from 35.9 percent a week earlier and bears sank to 29.4 percent from 37.9 percent.

The level of bullishness is “relatively neutral” for stocks, Kevin Lane, managing partner of Fusion Analytics Research Partners LLC, wrote yesterday in a posting on the Big Picture blog. Prices are unlikely to tumble at this point, he added.

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net