After trading sideways for the last two weeks now, bullish sentiment dropped back down below 30%, as these days it doesn't even take a market decline to make individual investors a little more nervous. According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment dropped from 31.25% down to 29.79%, for the third straight weekly decline and the 40th straight week where bullish sentiment has been below 40. The last time we saw bullish sentiment above 50% was during the first week of 2015!
Interestingly, while bullish sentiment declined, bearish sentiment also dropped, falling from 28.4% down to 26.8%. So, rather than turning more bearish as the market consolidates, investors are taking a wait-and-see approach with neutral sentiment increasing to 43.44% from 40.34% last week.