After another rocky week in equity markets, investor sentiment remains undecided with sentiment pretty evenly split across bullish, bearish, and neutral. According to the weekly sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment actually increased this week, rising from 32.4% up to 34.7%. Surprisingly enough, this is actually the highest level of bullish sentiment since late June. From a longer term perspective, we would also note that bullish sentiment has been below its bull market average of 38.1% for 24 straight weeks now, and has been below 40% for 28 weeks. Since 1987, there have only been two other periods where bullish sentiment remained below 40% for as long or longer than it has now, and the longest streak of sub 40% readings is 29 weeks.
In spite of the fact that bullish sentiment is at its highest level in more than two months, bulls are still outnumbered by bears. Bearish sentiment in the latest week increased from 31.7% up to 35.01%, which is the second highest reading since the start of August, so there are still plenty of bears out there to offset all of the bulls.