According to the American Association of Individual Investors bullish sentiment fell to 42.53% from 44.97%. bearish sentiment increased to 31.61% from 25.40% during the previous week. The percentage of investors who described themselves as neutral market fell to 25.86% from 29.63%. The results are somewhat surprising because the market has been positive during the last week. It seems retail investors are getting cold feet. Regardless, the high number of bulls still indicates that we are closer to a top than a bottom. Ideally you want to be buying stocks when the level of bearishness gets to around 50% or more. We are not there yet.
Here is a 6 month chart of the AAII survey.
Here is a longer chart which compares AAII bullish sentiment with the SP 500.
Finally here is a chart which compares AAII bearish sentiment with the SP 500.
Black Swan Insights
AAII Investor Sentiment Declines Sept 23, 2010
AAII Investor Sentiment Up Again Sept 16, 2010