After a strong week for equities, bullish sentiment rebounded this week partly erasing last week’s nine percentage point decline.  According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment rose to 40% from last week’s reading of 35.49%.

Along with an increase in bullish sentiment, we also saw a monster decline in bearish sentiment.  After rising ten percentage points last week, bearish sentiment erased all of that increase and then some by dropping 12.12 percentage points to 20.3%.  This is the lowest reading of bearish sentiment since the first week of 2015, and was also the largest one week decline in more than three years.  Based on this week’s survey readings, investors appear to have breathed a huge sigh of relief after last week’s rally in equities.

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