Sentiment readings were again mixed this week as the Investor’s Intelligence poll remained near very bearish level and the AAII poll reversed sharply. Bullishness in the II poll was little changed this week at 38%. Although far from extreme bearishness, this level of optimism is consistent with an oversold market, but does not necessarily signify that all is clear. The majority of the reliable short-term buy signals have coincided with lower levels of bullishness.
The AAII poll showed a sizable increase in bullishness. Optimism jumped 8% this week to 42.5%. The average reading is 39%. Charles Rotblut at AAII elaborated on the data:
“Though the numbers show a higher level of optimism, I would describe the results more as signaling a decrease in fear. The short-term bottom that is being established in the markets is giving investors hope that the worst of the correction is past us. Nonetheless, bearish sentiment is above its historical average for the sixth consecutive week and confidence remains fragile”