Bullish Sentiment Back Below 30%

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Includes: DIA, QQQ, SPY
by: Bespoke Investment Group

Individual investors just can't seem to get comfortable with the rally off the February lows. After rising as high as 37.36% (still extremely low by historical standards), bullish sentiment has now declined in two of the last three weeks. In this week's survey from AAII, bullish sentiment dropped from 33.8% down to 27.2%. That now makes it 22 straight weeks of sub-40% readings. As shown in the chart below, since peaking back in late 2014, bullish sentiment has been steadily trending lower.

AAII Bullish 033116

While bullish sentiment was down this week, bearish sentiment didn't see a proportional increase. According to this week's survey, bearish sentiment rose to 25.8% from last week's reading of 23.7%.

AAII Bearish 033116

Instead of turning bearish, investors continue to just not be able to make up their minds. As shown in the chart below, neutral sentiment jumped to 47.1% this week. That's the largest level of neutral sentiment this year, and one of the highest weekly readings since 2009. Whereas bullish sentiment has been trending lower, neutral sentiment has been steadily trending higher with higher highs for several years now. If it was a stock, it would be a beautiful chart!

AAII Neutral 033116