Normally, following lousy market action like we have seen over the last several days, it is typical to see investors become a bit more cautious, especially during the current bull market. As shown in the latest poll of individual investor sentiment, that is exactly what we saw this week. According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment dropped from 36.8% down to 31.2%. That was the lowest reading of bullish sentiment since February. Additionally, since the start of 2013 (65 weeks) there have only been ten other weeks where bullish sentiment was lower.
While bullish sentiment has plummeted by 10 percentage points in the last two weeks, most of those bulls have merely become neutral rather than bearish. Over the last two weeks, AAII's reading of bearish sentiment has only increased by 1.8 percentage points to 28.6%.
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