Less Optimism Among Individual Investors

Bullish sentiment as seen through AAII’s weekly survey of individual investors released this morning showed another drop in bullish sentiment. This comes following the first weekly decline that equities have seen so far in 2019. The percentage of investors expressing optimism dropped to 32.42% from 37.39% last week. The week prior to that was a recent high, and the highest since early November, at 41.63%. Given this week’s strong rally so far, it would not be surprising if bullish sentiment picks back up again in next week’s survey.

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Conversely, bearish sentiment rose to its highest level since the final days of January coming in at 31.06% versus 26.75% last week. Bearish sentiment has come well off of its lows of 20% only a couple of weeks ago. Where it currently sits is much more in line with its historic average of 30.5%.

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Meanwhile, neutral sentiment (investors not predicting any change in the stock market) moved slightly higher to 36.52% after dropping to 35.87% last week. Unlike bullish and bearish sentiment which have seen a degree of mean reversion, neutral sentiment has remained fairly elevated for most of the new year. Seems to make sense that investors largely report neutral sentiment as Q4 highs continue to be stiff resistance.

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