Once again this week, the latest sentiment survey from the American Association of Individual Investors (AAII) showed that investors want nothing to do with this market.  In the latest week, as the S&P 500 came within 1% of its all-time closing high, bullish stock market sentiment is just barely hanging on to the 20% level.  As shown in the chart below, in this week’s survey, bullish sentiment dropped from 22.33% down to 20.41%.  Once again, that’s the lowest weekly reading since February 11th when the S&P 500 was 10%+ lower.  This week’s reading also marks the 28th straight week and the 62nd week in the last 63 where bullish sentiment was below 40%.

AAII Bullish 051216

Although bullish sentiment is right near its lows for the year, bearish sentiment is not spiking.  In this week’s survey, bearish sentiment increased from 30.34% up to 31.29% and is nowhere near the high 40% range we saw back in January.

AAII Bearish 051216

That leaves us with the neutrals.  In this week’s survey, neutral sentiment increased to 48.3%.  Looking at the chart below, this is the third period in the current cycle where neutral sentiment has reached such lofty levels.  Interestingly enough, the prior two periods were in May and December 2015, which also happen to be the two other times when the S&P 500 was flirting with 2,100. It seems as though at these price levels, investors don’t necessarily want to be bearish, but they are also finding it tough to find reasons to justify a bullish posture.

AAII Neutral 051216


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