For several months now, we have been highlighting the fragile state of sentiment on the part of individual investors. Therefore, given the huge negative reversals in the market last Friday and Monday in the wake of the Brexit referendum, one would have thought that sentiment would take a hit. Not so. In the latest sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment actually increased from 21.97% up to 28.91%. While that is the biggest weekly increase in a month, it is also the 35th straight week that bullish sentiment was below 40%.
While bullish sentiment saw a seven percentage point increase, bearish sentiment didn’t decline by nearly the same magnitude, falling from 35.23% down to 33.42%. In spite of the decline, bears still outnumber bulls as they have done on a pretty consistent basis for the last ten weeks.