The weekly sentiment survey from the American Association of Individual Investors (AAII) showed that bullish sentiment rose to 48.4% from 47.2%.  On the other end of the spectrum, bearish sentiment dropped to 18.9% from 23.6%.  While this week’s drop in bearish sentiment looks like a large shift, we would note that it doesn’t even erase the 6.4 percentage point rise we saw in the prior week.  That being said, there have only been four other weeks since the start of 2006 where bearish sentiment was lower than it is now.  Two of them were this January 2012, and the other two were in December 2010 and January 2011…..

Both Bullish Months as you can see in the charts below, especially the gain from the December 2010/January 2011 low Bearish Sentiment period was significant:

December 2010 Open 1177.75 – Close @ 1253.00 for 6.38% Gain followed by still another gain in January 2011 while bearish sentiment was so low. 

Ultimately the total gain starting while bearish sentiment was so low in December 2010 and January 2011 of 14.89% into April 30th 2011.

January 2012 Open 1274.75 – Close so far January 26th @ 1315.25