Sentiment Still Overwhelmingly Bullish

For the third week in a row, just under half of the respondents to the weekly AAII sentiment survey reported as bullish. This week’s bullish sentiment reading came in at 48.06%, which was down just slightly from 49.07% last week. While lower in the past week, bullish sentiment remains elevated in the top decile of readings over the past decade. Granted, it is also still below the high of 55.84% from November 12th. Similarly, the Investor Intelligence survey of equity newsletter writers also saw bullish sentiment drop slightly, falling from 64.7% to 64.4%. But again just like the AAII survey, that is a historically elevated level in the top 3% of all readings since 1963.

With bullish sentiment lower, a higher percentage of investors reported as bearish. Whereas last week saw bearish sentiment fall to 22.66%, the lowest level since the first week of 2020, this week bearish sentiment rose 4.2 percentage points to 26.86%. That is still below the reading of 27.47% from the last week of November and at the low end of the past few years’ range. In terms of bearish sentiment, the Investors Intelligence survey is again echoing these results. This survey saw bearish sentiment rise 0.1 percentage points to 16.8%.

Overall, sentiment remains heavily in favor of bulls. As shown below, for both the AAII and Investors Intelligence surveys, the bull-bear spreads are at historically high levels.

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