This week’s sentiment survey from the American Association of Individual Investors (AAII) showed that bullish sentiment declined from 29.5% down to 28.5%, which is the lowest level of optimism since the late September lows. After a brief peak above 40% in late October, bulls are jumping off the bandwagon once again.
In last week’s update, we highlighted the big increase in neutral sentiment, which touched its highest levels since Spring. This week, all those neutrals moved into the bearish camp pushing bearish sentiment up to 29.9% from last week’s level of 21.2%. That represents the largest one-week increase since 10/1. The increasingly prevalent view among investors these days seems to be caution over optimism.