Bullish Sentiment Trend
The S&P 500 has experienced a tumultuous beginning to the new year, yet this unsettling surge hasn’t managed to crush bullish sentiment. According to the latest report from the American Association of Individual Investors (AAII), bullish sentiment has seen a notable rise. It climbed from 46.3% in the final week of 2023 to 48.6% this week, nudging back towards the multi-year high of 52.9% achieved two weeks ago. This leaves bullish sentiment perched over a full standard deviation above its historical average, underscoring the resilience of market optimists.
Bearish Sentiment and Bull-Bear Spread
Conversely, bearish sentiment appears less pronounced, currently standing at 23.5%. Although this figure is lower than the historical average of 31%, it’s not as evident as bullish momentum. The bull-bear spread continues to favor bulls, displaying a 25-percentage-point chasm between the two sentiments, reaffirming the predominance of bullishness in the market.
Including other weekly sentiment surveys, the overall sentiment picture, while showing a tilt toward bullishness, appears somewhat muddled. Notably, the Investors Intelligence survey, after its holiday hiatus, reported the highest reading on bullish sentiment since November 2021. On the other hand, the NAAIM Exposure index, which tracks active managers’ equity exposure, recorded a substantial plunge from a reading above 100 (indicating managers were fully invested long) to 71, marking its lowest level since early November.
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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
