It really didn’t take much for the individual investor to sour on equities. After nearly three years where bulls failed to gain a majority in the weekly sentiment survey from AAII, in late December of last year, bullish sentiment finally topped 50% and reached as high 59.75% in early January. Then the correction came. After the swoon in equities in late January/early February, sentiment remained surprisingly resilient at just under 50% in mid-February. As the initial bounce off the February lows lost momentum and volatility continued, individual investors have had enough and are quickly jumping off the bullish bandwagon.
In this week’s sentiment survey from AAII, bullish sentiment plummetted nearly 11 percentage points, falling from 37.28% down to 26.4%. That’s the lowest weekly reading since the end of August and the largest two-week decline since June 2013.
While investors have been exiting the bullish camp, bearish sentiment hasn’t seen much of a bounce. At 28.38%, it is slightly higher than bullish sentiment, but it has been higher as recently as early February.
Neutral is where it’s at these days. In this week’s survey, the non-committal camp increased from 39.3% up to 45.2%. That’s the highest weekly reading since May 2016 and the largest two-week increase since December 2015.