The latest reading on sentiment from the American Association of Individual Investors showed bulls stepped back in as the S&P 500 generally rallied in the past week.  After a historic low of only 16.4% last week, the percentage of respondents reporting as bullish rose back up to 26.9%. That is the first time over a quarter of respondents reported as bullish since the end of March. The double-digit weekly increase was also the largest since last October.

The increase in optimism was met with a 6.5 percentage point drop in the share of respondents reporting bearish sentiment.  Even after that decline, over half of the respondents responded as bearish. That is the first time with back-to-back weeks of over 50% readings since May 2020. The current level of 52.9% is also still in the top 3% of all readings going back to the start of the survey in 1987.

That means in spite of a small improvement, sentiment continues to heavily favor bears.  The bull-bear spread returned to a more normal but still very low reading of -26.

Fewer respondents were also reporting that they expect equity market prices to hold steady as neutral sentiment fell to 20.3%.  That was the lowest reading since November 2020 when it was only one percentage point lower than now.   Click here to learn more about Bespoke’s premium stock market research service.