The American Association of Individual Investors released this week’s reading on investor sentiment and things were little changed despite the S&P 500 having fallen roughly 4.75% in the past week.  Last week, bullish sentiment rose above 35% for the first time since April 9th reaching 35.75%. This week, optimism held above 35%, but it was slightly lower than last week dropping to 35.29%

Conversely, bearish sentiment rose 2.26 percentage points this week. That is the first time bearish sentiment has moved higher (and the first time bullish sentiment has moved lower) since the last week of September. Whereas last week marked the end of a record-long streak of negative readings of the bull-bear spread (meaning bearish sentiment outweighed bullish sentiment), this week bearish sentiment is dead even with bullish sentiment at 35.29%.

In the history of the AAII survey dating back to mid-1987, there have only been 47 weeks in which bullish sentiment matched bearish sentiment with the most recent example being late January of last year.  On average across those instances, the two readings on sentiment have been 33.5%. In the table below, we show all 11 occurrences that have happened without another occurrence in the prior year. As shown, the last such occurrence was in September of 2018, a few months before the previously mentioned January 2019 instance. Back then, bullish and bearish sentiment stood at 32.04%. As for the performance of the S&P 500, even readings in bullish and bearish sentiment have usually been followed by gains although the magnitude of the advance is pretty much right in line with the historical averages for all periods. Click here to view Bespoke’s premium membership options for our best research available.

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