Individual investor sentiment took a major hit this week as Washington headlines give investors another excuse to not like equities.  According to the weekly AAII survey, bullish sentiment dropped from 32.73% down to 23.85%.  That drop is the largest one-week decline since July 2015 and takes bullish sentiment down to its lowest level since last November’s election.  Also, in case you are still keeping score, bullish sentiment has now been below 50% for a record 124 straight weeks.

AAII Bullish Sentiment 051817

While bullish sentiment tanked, they didn’t all move into the bearish camp.  As shown in the chart below, bearish sentiment increased by less than half as much as bullish sentiment declined.  However, at a level of 34.25%, more than a third of individual investors consider themselves bearish.

AAII Bearish Sentiment 051817

Neutral sentiment surged back above 40% this week, rising from 37.05% up to 41.9% to its highest weekly reading since the election.  While investors were more than happy to sit on their hands in the weeks and months leading up the election, now it seems as though they are stepping to the sidelines to wait out what becomes of the Russia investigations.

AAII Neutral Sentiment 051817

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