Key Takeaway: Investor sentiment has turned more cautious over the past month. This week’s market bounce comes as the Investors Intelligence Bull-Bear spread is approaching a key threshold.
More Context: Almost all the net gains for the S&P 500 in recent years have come when the II Bull-Bear Spread has been above 20%. If this week’s ounce in stocks is a new beginning of strength (which is a question we look at in this week’s Three for Thursday video update), it could help forestall the unwind in sentiment. Breadth getting back in gear would enhance the case that we have indeed experienced just a a healthy reset in sentiment. Elsewhere across the sentiment landscape we see that active managers have rushed back into the market this week but the AAII survey showed more bears than bulls for the second week in a row.