As the S&P 500 broke and held above its August range in the past week, sentiment has shifted more positive.  The percentage of investors reporting as bullish in AAII’s weekly survey rose from 28.64% last week up to 33.13%.  That is the highest since August 1st when 38.44% reported bullish sentiment. With two consecutive weeks of improvements, bullish sentiment is now well off of its lows from the second week of August (21.66%) and is back within a normal range relative to its historical average of 38%. This week marks the sixth straight week with below average bullish sentiment.

Inverse to bullish sentiment, bearish sentiment is now the lowest that it has been since the first week of August.  With bearish sentiment falling 8.26 percentage points this week to 31.25%, it was the largest drop since June 13th’s 8.38 percentage point decline.

Although most of the loss in bearish sentiment went to bulls, a predominant share of investors remain neutral.  Ticking up to 35.63% this week, neutral sentiment remains above its historical average (31.52%) as it has for five weeks in a row and 31 of the total 36 weeks this year.  This was also the first time that neutral sentiment has outweighed both bulls and bears since the end of July. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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