Last week I mentioned that the bullish percentage on the Investors Intelligence report had declined in recent weeks, but that the bearish percentage hadn't really started to increase.

That phenomenon continued this past week as the bullish percentage dropped to 43 which is the lowest reading since last September.

Meanwhile the bearish percentage declined to 19.4 percent.

The Investors Intelligence report isn’t the only sentiment indicator that has been turning less optimistic either. The CBOE Equity Put/Call Ratio has been moving higher in recent weeks and the 21-day moving average on the indicator hit a six-month high last Tuesday. With the put/call ratio, a high reading means pessimism is higher.

The Rydex Nova/Ursa ratio has also been showing signs of increasing pessimism. The ratio dropped to its lowest reading in the last two months last week.

After four straight losing weeks for the S&P, these three indicators showing more pessimism or less optimism suggests that the market is due for a rally over the next few weeks.