The S&P 500 is up 2.75% since last Friday, which would be the best weekly performance since early June after rebounding from consistent selling in May.  Despite this, the index is still range-bound, and sentiment has yet to pick up.  This week’s AAII sentiment survey saw the percentage of investors reporting as bullish fall to 26.13% from 26.64% last week.  Bullish sentiment has now been more than 1 standard deviation below its historical average for four consecutive weeks. That is only the 12th such streak in the history of the data going back to 1987.  The most recent similar streak was an identically long one ending on June 13th of this year.

While bullish sentiment saw a fairly mild decline, bearish sentiment rose 3.5 percentage points to 42.21%. Bearish sentiment is still below where it was at the start fo the month when it peaked at 48.2%, but it also remains the predominant sentiment for four weeks running.  Negative sentiment is also elevated compared to where it has been historically and has been one standard deviation above the historical average for three of the past four weeks.

Most of the gains in bearish sentiment came out of the neutral camp.  The percentage of investors reporting neutral sentiment fell around 2 percentage points to 31.66%.  While this is not a new low, neutral sentiment has been trending lower over the past several weeks after spiking to its highest levels since 2016 earlier this year.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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