The American Association of Individual Investors conducts a weekly survey of its members, asking if they are bullish, bearish or neutral about the stock market. This week’s results are a bit of a surprise: The percentage of bulls declined from 35.4 percent down to 28.7 percent, bringing it down near the lowest levels we have seen in a year.
But bearish sentiment also declined sharply, from 32.0 percent down to 24.1 percent. If there are fewer investors who are optimistic about the market, and fewer who are pessimistic about it, what does that leave? That’s right: Everyone is neutral. In a single week, neutral sentiment shot up from 32.7 percent up to 47.2 percent.
So according to this one measure, nearly half of all investors are neutral on this market, expecting neither good news nor bad news. This is the highest level of neutrality we've seen since February 2003.
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