The market has been extremely volatile in the last four weeks. One percent daily moves have been the norm rather than the exception.
Given that backdrop, you would expect the sentiment indicators to be bouncing around quite a bit, but that has not been the case for the AAII Sentiment Survey and the 21-day moving average on the CBOE Equity Put/Call Ratio.
The AAII sentiment survey from last week showed a bullish percentage of 39 percent and a bearish percentage of 30.5 percent. This put the ratio of bulls to bears at 1.28.
The ratio has come in between 1.27 and 1.29 in each of the last four weeks. The bullish percentage has ranged between 39 percent and 42.7 percent, while the bearish percentage has ranged between 30.5 percent and 33.7 percent.
The 21-day moving average on the CBOE Equity Put/Call Ratio has been stuck between 0.60 and 0.70 for the past eight days. The moving average had risen for five straight weeks, but it dipped slightly last week.
The exception to the stagnation is the CBOE Volatility Index (VIX). In the last three weeks, the VIX jumped as much as 45 percent, 46 percent and declined almost 27 percent last week.
With a number of key economic reports due out during the next few weeks and the ongoing earnings season, I would expect the VIX to continue gyrating wildly in the coming weeks.
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