The S&P 500 has pressed ever closer to a new all-time high, but as we noted last week, sentiment remains fairly muted. Historically, when the S&P 500 has been at or within 1% of an all-time high bullish sentiment has sat around an average of 40%. Bearish sentiment, on the other hand, has typically been around 25.5%. With the S&P 500 less than a tenth of a percent away from its February 19th closing high today, bullish sentiment from AAII stands at 30.04%; roughly 10 percentage points away from what could be expected when the S&P 500 is so close to an all-time high. Although bullish sentiment is lower than might be normal for where the S&P trades, it did pick up considerably week over week, rising 6.75 percentage points in what was the largest single weekly increase since March 5th when it rose by 8.31 percentage points. Even after that increase, though, bullish sentiment was higher less than a month ago (July 16th).
Again, historically bearish sentiment has only been just over 25% when the S&P 500 is close to all-time highs. That is far from the case today as 42.12% of respondents in AAII’s survey reported as bearish. Conversely to bullish sentiment, though, bearish sentiment fell 5.48 percentage points. That was the largest week over week decline since May 21st’s 5.59 percentage point decline, leaving bearish sentiment at its lowest level since June 11th.
Those moves in bullish and bearish sentiments led the bull-bear spread to be cut in half, rising from -24.31 to -12.08. That is the most the spread has climbed in a single week since February when it rose from -1.35 to 14.93. Despite that large move, the spread still favors bears as the record streak of negative readings lives on. The bull-bear spread is now at its highest reading since June 11th.
Meanwhile, neutral sentiment was slightly lower, dropping 1.27 percentage points to 27.84%. That only leaves it at its lowest level since July 23rd. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.