Only two weeks ago, bullish sentiment according to the AAII had collapsed to some of the weakest readings of the post-pandemic period. Over the past two weeks, sentiment has gradually recovered with a significant pick up in this final week of the year. Now at 37.7%, bullish sentiment gained 8.1 percentage points this week for the largest increase since October. While recovered, the actual level of bullish sentiment is far from notable essentially in line with the historical average of 38%.

The increase in bullish sentiment over the past two weeks largely borrowed from bears. Bearish sentiment fell 3.4 percentage points in the most recent week following a 5.4 percentage point drop last week. Now at 30.5%, the share of respondents reporting as bearish is right in line with the historical average.

Given the inverse moves of the two readings, the bull-bear spread is now back into positive territory after five weeks of negative readings. At 7.2, the spread is not particularly elevated and only 0.2 points away from the historical average of 7.4.

Not all of the gains to bullish sentiment have come from former pessimists.  The share of respondents reporting neutral sentiment has also unwound this week falling from 36.6% to 31.8%. That is the lowest reading since the first week of the month when exactly 31% of respondents reported neutral sentiment. Click here to view Bespoke’s premium membership options.

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