Bullish sentiment returned to its declining ways this week, falling for the sixth time in the last eight weeks. According to AAII, bullish sentiment fell from 28.79% down to 25.47%. This makes it 50 straight weeks where bullish sentiment has been under 40% and the 84th week in the last 85. One fact weighing on overall sentiment of individual investors is certainly the election. In this week’s special question, respondents were asked how much of an influence the election was having on their expectations for the market. According to the results of the survey, nearly half (49%) said the election is only having a minimal impact. That said, 23% of respondents noted that the election is having a large impact. That would suggest that once the election has passed, the increased certainty would be positive for the market, but the way investors have hopped from worry to worry over the years, something tells us that come November, investors will find something else to worry about — most likely the Fed.
Although bullish sentiment saw a three point decline, bearish sentiment increased by nearly twice that, as some neutrals also migrated into the bearish camp. This week’s increase was the fifth rise in the last eight weeks, and as the chart below illustrates, the trend higher off the late 2015 lows remains intact.