Sentiment Around New Highs

Jun 12, 2025

In Tuesday’s Closer, we provided an update on monthly sentiment gauges, noting broad improvements since the April low. Of those inputs that have perked up is the weekly AAII survey. This week’s release saw the percentage of respondents reporting as bullish rise once again, to a two-week high of 36.7%.

The other side of the equation—the percentage of respondents reporting as bearish—had a more notable move this week. Only 33.6% of respondents were bears, which was the lowest reading since the week of January 23.

Put together, the bull-bear spread came in at 3.1, or alternatively, bulls outnumber bears by 3.1 percentage points.  There was another positive reading in the spread a couple weeks ago, but this is the highest spread since the last week of January when it was at 7.  In all, this indicates that investors have begun to shift more bullish rather than the consistent bearish tones from the past few months.

Also worth noting is that investors’ sentiment has made this improvement in tandem with a push in stock prices back near record highs. As the S&P 500 is about 1.5% below its February 19 peak, the current level of sentiment is actually lower than what might be expected.  Historically, AAII sentiment (measured by the bull-bear spread) has averaged more bullish readings when the S&P is closer to a record, and readings become more bearish as it falls further from the highs (save for extreme drawdowns where sentiment actually begins to pivot to be more bullish). For the present distance from a high, the bull-bear spread has historically averaged in the high single digits compared to 3.1 today.  In other words, sentiment does not appear to have gotten over its skis as the index attempts to break out.