Over the last five weeks, the bullish sentiment has been falling fast from the high levels we were seeing. Unfortunately, they are only reaching moderate readings as compared with those from the past year.

As I mentioned last week, the bullish percentage on the Investors Intelligence report is falling, but the bearish percentage isn’t really jumping all that much.

The bullish percentage is currently at 41.5 percent and the bearish percentage is at 27.7 percent, giving us a ratio of 1.5. The highest ratio of the past year is 2.4 back in early April, while the lowest ratio is 1.27 from last November.

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The 21-day moving average on the Chicago Board Options Exchange Equity Put/Call ratio has jumped from 0.623 earlier this month to 0.687 as of Friday. The highest reading for the past year is 0.78, while the lowest reading for the past year is 0.58, putting the current reading dead in the middle of the past year’s readings.

What does all of this mean? I look for the market to experience a mild rally in the coming days as a result of the daily charts hitting oversold levels and due to the extreme shift in sentiment.

Because the sentiment indicators are still in the middle range of readings for the past year, I look for the intermediate downward trend to resume after the brief rally.