The latest sentiment figures from AAII were released earlier this morning and showed a pretty healthy increase in bullish sentiment. After dropping down to 24% last week, bullish sentiment increased 4.79 percentage points to 28.79%. That was the largest weekly increase since July, but even with that jump, optimism still remains well below levels that would be considered average. In other words, after the largest weekly increase in nearly three months, bullish sentiment rose to below average levels! This week’s reading is the 49th straight week that bullish sentiment has been below 40% and the 84th week in the last 85. There are still twelve weeks left in 2016, but at the rate things are going, 2016 is on pace to be the first year in the history of the AAII survey that bullish sentiment never went above 40%.
While bullish sentiment increased by just under 5 percentage points, bearish sentiment plummeted by over nine percentage points, falling from 37.11% down to 27.9%. That was the largest one-week decline since mid-February, but as shown in the chart, the trend of higher lows for bearish sentiment remains in place.