Overwhelmingly Bullish, Even For All Time Highs

Not only has the S&P 500 returned to new highs but sentiment is also making a push higher. As shown below, the latest AAII Sentiment Survey showed more than half of respondents surveyed responded as bullish. At 51.7%, bullish sentiment is now slightly below the multi-year high from December 21st (52.9%).

While a majority of respondents are reporting as bullish, less than a quarter are bearish.This week, bearish sentiment fell to 21.8% which was a half percentage point uptick versus the previous week.

Regardless of the increase in bears, bulls netted a much larger increase resulting in the bull-bear spread to rise to 29.9.Again, that indicates the most bullish sentiment since December.

Given the S&P 500 is currently trading at record highs, we wanted to check in on how sentiment currently stacks up versus past record closes for the S&P.As shown, it looks a bit more optimistic than normal given where the market is trading as bullish sentiment has historically averaged a reading of 41% when the S&P 500 was at record highs. While the gap between the historical average and now is less dramatic, bearish sentiment likewise shows greater optimism now than in the past.

Finally, we would note that it is not only the AAII survey which is showing high levels of optimism.Factoring in other weekly sentiment surveys, the Investors Intelligence survey saw the highest number of bulls since July 2021 and the NAAIM Exposure Index showed active investment managers added long exposure to equities in the most recent week.Putting them all together into our Sentiment Composite, aggregate investor sentiment now ranks in the 98th percentile of all periods since data began in 2006 and a hair below those from last December. Before that, the only periods with similarly elevated levels of sentiment were December 2010, December 2013, early 2015, around the new year of 2018, the end of 2020, and the spring of 2021.

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Disclaimer: Bespoke Investment Group, LLC believes all information contained in this report to be accurate, but we do not guarantee its accuracy. None of the information in this report or any ...

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