Despite the fact that the S&P 500 and Nasdaq are right near all-time highs, individual investors are stuck in a rut and seemingly not in the mood to party.  According to the American Association of Individual Investors (AAII), bullish sentiment saw a slight decline falling from 31.47% down to 30.84%.  This represents the eighth straight week where bullish sentiment has been below its bull market average of 38.65%.  The last time we saw bullish sentiment below its bull market average for this long was in August of last year.

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The most interesting aspect of this week’s sentiment report was neutral sentiment.  Individual investors may not be bullish, but they aren’t bearish either.  With shaky economic data, valuations on the high side of historical norms, and the prospect of higher rates in the future, they don’t know what to do and neutral sentiment has stayed elevated as a result.  In this week’s survey, neutral sentiment rose to 47.21%, which is the highest level since May 2003.  This week’s reading was also the fourth straight week where neutral sentiment was above 45%, which is the longest streak since early 1989.

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