This week’s AAII Sentiment Survey reported a 6.1% decline in bullish investor sentiment to 28.1%. The bullish sentiment level is now near one standard deviation below the long term average. Nearly all of the decline in the bullish sentiment showed up in the bearish number which increased 5.5%. The bull/bear spread is now -10.4 percentage points.
The NAAIM Exposure Index report this week also shows a decline in long equity exposure and is now at 80.1% versus 102% in March.
The market typically does not experience a correction when investors are properly positioned for one. On the other hand, the market’s lack of any significant pullback going back to early 2016 makes one believe a pullback would not be a surprise.
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