AAII Sentiment still has room to run

Individual investor sentiment is not yet at complacent or euphoric overbought levels and still has room to run, even as the major U.S. equity indices have continued to reach new highs.

AAII Bullish Sentiment has reached its highest level of the year at 45.9 but still has room to run until contrarian bearish levels well into the 50s based on chart levels and overbought standard deviation bands.

Chart 1: AAII Bullish Sentiment

AAII Bearish Sentiment dropped to 35.6 last week but still has room to run until contrarian bearish levels into the low 20s and even down toward 15-12 based on overbought standard deviation bands.

Chart 2: AAII Bearish Sentiment

The spread between AAII Bullish Sentiment and AAII Bearish Sentiment achieved its third consecutive week with a positive reading (more bulls than bears), reaching 10.3. However, this sentiment indicator has plenty of room to rise prior to reaching complacent or euphoric overbought levels.

Chart 3: The spread between AAII Bullish Sentiment and AAII Bearish Sentiment