In the wake of the Italian elections, bullish sentiment measured by the American Association of Individual Investors (AAII) plummeted from a high of 41.8 per cent down to as low as 28.4 per cent last week.
Meanwhile, the Dow Jones Industrial Average continued its bullish march to an all-time high.
This week, AAII bullish sentiment ticked up to just 31.1. This is well below the historical average of 39 per cent.
“The Dow’s new record high gave some AAII members reason to believe the current rally will continue,” wrote Charles Rotblutt in a post on Pragmatic Capitalism. “It also heightened concerns other AAII members have about the markets being overbought and due for a pullback in prices.”
Meanwhile, bearish sentiment rose by 1.9 percentage points to 38.5 per cent in the same time period. This is much higher than the historical average for bearish sentiment, which is 30.5 per cent.
Here’s the chart from Bespoke Investment Group:
Business Insider Emails & Alerts
Site highlights each day to your inbox.