The Dow just crossed another 1,000 point threshold, and most major US equity averages are at or near all-time highs. So what do you think should happen to investor sentiment? Well, these days investors would naturally get more bearish! That’s the way things shook out in the numbers regarding AAII’s weekly sentiment survey. In this week’s update, bearish sentiment spiked from 24.32% up to 32.1%. That’s the highest weekly reading since mid-May and the largest weekly increase since March! So much for animal spirits.
Even though bearish sentiment spiked this week, bullish sentiment also ticked higher, rising from 34.46% up to 36.11%. Ironically, that was also the highest weekly reading for bullish sentiment since early May, but it still marks a record 135th straight week where bulls have not been in the majority.
All those new bears this week came from the neutral camp where sentiment dropped from 41.22% down to 31.79% in what was the largest one week decline for fence-sitters since the week after the election. If there’s anything positive to be said about this week’s sentiment figures, you can say that at least individual investors are taking a stand.