The chart below compares the S&P 500 since the beginning of 2009 to the weekly bullish sentiment reading from the American Association of Individual Investors (AAII). Ā The two lowest readings in sentiment during this period came on 3/5/09 (18.92%) and 4/11/13 (19.31%). Ā If you look closely at the chart, the level of the S&P 500 during these two weeks couldn't have been farther apart. Ā In early March 2009, the S&P 500 was trading at multi-year bear market lows, while on 4/11/13, the S&P 500 closed at an all-time high. Ā In other words, investors were as bearish at the depths of the financial crisis as they were when the market hit an all-time high, and that pretty much sums up the state of sentiment during this entire bull market.
Over the last two weeks, we have seen a modest rebound in bullish sentiment, which now stands at 28.29%. Ā However, even after the rebound, bullish sentiment is currently lower than it has been in more than 85% of all prior weeks during this bull market, and it's well below the average of 37.8%.
Copyright Ā© Bespoke Investment Group
