Investors remain curiously reticent in the face of a new all-time high in the S&P 500 Index (SPX). The latest AAII investor sentiment poll showed a slight drop in the percentage of bulls to 38% from last week’s 39%. Meanwhile the percentage of bears fell from last week’s 33% to 29%.
While bearish sentiment is admittedly low, bullish enthusiasm is also relatively muted given the extent of the market rally in the first quarter of 2013. Bull/bear sentiment readings are similar to what they were in August 2013 after the market rallied for 10 weeks before settling into a lateral consolidation pattern for a few weeks. This was followed by yet another rally in September.
Bottom line: Until we see a notable increase in bullish sentiment the interim market uptrend will most likely remain intact.