All it takes is one bad week these days. After closing at its high for the year last Wednesday, the S&P 500 has seen five straight down days (and on pace for a sixth). In that period, the S&P 500 is down a little over 2%, which has been enough for investors to sour on equities once again. According to the weekly sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment declined from 27.83% last week to 25.35% this week, representing the 33rd straight week that bullish sentiment has been below 40%. We would also note that outside of one week last October, bullish sentiment has been below 40% since March 2015. That also happens to be right around the time the S&P 500 first started flirting with 2,100.
As mentioned above, the five-day losing streak for equities has really hit a nerve for investors and that has caused bearish sentiment to spike from 27.83% last week to 37.5% this week. That’s the highest reading in bearish sentiment since 2/18 and the greatest one-week increase since the week of 2/11. While this is a relatively high reading compared to the last three months, bearish sentiment is still well below the 48.7% readings we saw back in January and February.