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The post-election surge in individual investor optimism continued this week as AAII Bullish Sentiment increased from 46.7% up to 49.9%. So after finally breaking above 40% for the first time in 54 weeks last week, now it is testing 50%! This week’s increase in bullish sentiment is the highest weekly reading since January 2015 and the largest three-week increase (26.25 percentage points) in over six years. Think about it this way — in the last three weeks, bullish sentiment has more than doubled!
Given the large increase in bullish sentiment, bearish sentiment has shrunk of course. In this week’s survey, bearishness came in at 22.08%, which is the lowest reading since April of this year. While not nearly as notable as the move for bullish sentiment, the trend of higher readings that has been in place since late last year has clearly been broken.