With the market’s reversal over the past week, as expected, investor sentiment has been becoming less bullish. From the AAII survey of individual investors, bullish sentiment had its largest one week drop since mid-November 2017, falling 15.05 percentage points. Bullish sentiment is now down to 30.6% from 45.66% last week. This is the lowest level for bullish sentiment since the first week of August, but it’s still pretty far from the lowest level on the year that we saw in April when it fell to 26.09%.
Investors flooded into the bearish camp this week with the largest one week rise in bearish sentiment since June. Bearish sentiment rose to 35.5%; the highest level since the first week of July.
Not all investors that are no longer bullish have become bearish, though. Neutral sentiment has seen an uptick this week moving to 33.9%, which is back to around where it was a couple weeks ago. Since this survey was released this morning, the current reading may not have picked up on the full impact of yesterday’s movements on investor sentiment, which we would expect to cause investors to heavily flock towards uncertainty. If this small lag is the case, next week we could be in for an interesting release.