The S&P 500 closed a record high last week after two strong weeks erased the losses that we saw to start the year.
As you might expect, with the S&P 500 hitting a new high, investors shifted toward a more bullish posture, according to the three sentiment indicators I follow most closely.
The AAII Sentiment Survey ratio saw the biggest shift, as the bullish percentage jumped from 35.5 percent to 40 percent and the bearish percentage fell from 32.4 percent to 20.3 percent. These moves caused the ratio of bulls to bears to jump from 1.10 to 1.97.
The CBOE Volatility Index (VIX) had jumped as high as 22.81 two weeks ago, but the bullish move in the last two weeks caused the indicator to fall sharply. The close last week was 14.69, the lowest weekly close since the week of Dec. 22.
The 21-day moving average on the CBOE Equity Put/Call Ratio has fallen during the last two weeks and came in at 0.6590 last Friday. That reading is down from a high of 0.6852 on Feb. 2.
While none of these three indicators are at extreme bullish levels, it is important to notice the shifts.
If the indicators stay away from extreme levels of bullishness, the S&P 500 could continue to move higher for the coming weeks.
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