If the contrarian individual investor sentiment measure reported by the American Association of Individual Investors indicates anything, individual investors seem to be questioning the sustainability of this market rally. Because the Sentiment Survey is a contrarian measure, just maybe the market advance has further upside. In AAII's report this morning, bullish sentiment fell 5.4 percentage points to 31.6% which is nearing an extreme for the reading. Most of the decline in bullish responses showed up in the neutral reading as it increased 4.6 percentage points to 34.9%. This is the highest neutral rating since it was reported at 42% in early November of last year.
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