This week’s sentiment report from the American Association of Individual Investor (AAII) showed that after a nice rally in equities and a big turkey dinner last week, investors are increasingly less willing to take a stand on the market in one way or the other. In this week’s report, bullish sentiment dropped from 32.36% down to 29.49% for the first sub 30% reading in bullish sentiment since the early October lows.
While bullish sentiment declined, the decline in bearish sentiment was even larger, falling from 26.03% down to 21.2%. So where are all these bulls and bears going? Back to the neutral camp. In this week’s report, neutral sentiment rose from 41.61% up to 49.31%. As shown in the chart below, that takes the ‘undecideds’ back near the highs from the Spring, and before that you have to go back to 2003 to find a time when neutral sentiment was this high.