Average bearish sentiment just climbed to 38.1%, the highest reading since May 2025.
Here’s the chart:
Let's break down what the chart shows:
The top panel displays the S&P 500 price as a black line.
The middle panel displays the average bullish sentiment from the Investors Intelligence and AAII surveys as a green line.
The bottom panel displays the average bearish sentiment from the same surveys as a red line.
The Takeaway: The S&P 500 sits only about 5% below its highs. The pullback in price remains small.
But sentiment has shifted far more than the index.
Bullish sentiment just dropped to 36.5%, the lowest reading since June 2025. Confidence has faded for months while the index stayed near the top of its range.
Right now, bears outnumber bulls.
The average bear reading just reached 38.1%, the highest level since May 2025. Pessimism has rebuilt while optimism has faded.
Bulls have printed lower highs and have now reached their lowest level in nine months, while bears have printed higher lows and at the same time have hit their highest level in ten months. That shift marks a clear change in the tone of the crowd.
The market sits only 5% off the highs, yet the crowd has already flipped from optimism toward caution.
So, does price catch down to sentiment, or does sentiment reset?
