As the S&P 500 moved up towards an all-time closing high last week, we noted bullish sentiment levels were relatively muted in spite of this price action. We also highlighted that it is not exactly common for the market to reach new highs when sentiment is this subdued.  But as the S&P 500 reached those new all-time highs one week ago today—followed by several sessions of selling—investors haven’t been excited by the new highs.  This week’s AAII survey of investors showed hesitation more than anything with very small changes across the board. The percentage of investors reporting as bullish rose only 0.08% to 29.59%.  Bullish sentiment saw a similar sized move only one month ago when it had risen from 24.71% to 24.79% in the final week of May. Given these readings, bullish sentiment remains at the lower end of its normal range sitting over 8.5 percentage points from the historical mean.

Bearish sentiment perfectly mirrored bullish sentiment this week as the percentage of investors pessimistic investors falling by just 0.08% to 32.05% and still above the historical average of 30.32%.

Neutral sentiment was completely unchanged this week. Holding firm at 38.36%, this was the first time that neutral sentiment saw no change since February 26, 2009.  Like bearish sentiment, while off of recent highs, neutral sentiment remains elevated above the historical average of 31.5%.

Again, across the board, the changes in sentiment levels in the AAII survey were very small this week.  In fact, bullish, bearish, and neutral sentiment all simultaneously moving less than 0.1% is something that rarely has happened in the history of the survey. This was the first occurrence in over 20 years. The prior times this has occurred, twice in 1999 and once in 1995, all saw no change in these readings week-over-week (prior to 2000, AAII readings weren’t expressed in decimals). While it is a small sample size, forward performance has generally leaned positive going forward, although we wouldn’t put much weight into it.Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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