Bullish stock market sentiment from individual investors spiked immediately following Trump’s victory last November. There was a thought that this might mark the beginning of a new trend, but the bounce was short-lived. At this point, AAII bullish sentiment (which is reported weekly) is back down to where it was a couple of months before the election. This week’s bullish sentiment reading came in at 32.8%, which is up a point from where it stood last week. It appears as if the steep post-election rally that has taken the Dow up to 20,000 has individual investors concerned about stocks going “too far, too fast.” But that means that sentiment should start to increase again if we see a pullback. Unfortunately, sentiment readings don’t tend to work that way. Any market decline will likely get investors even more cautious.
With 32.8% bullish, 33.03% neutral, and 34.17% bearish, individual investor sentiment couldn’t get more evenly distributed. No wonder the market has been trendless with no upside or downside momentum experienced in weeks.