This Bearish Sentiment Survey Tells Me 1 Thing: Stay Bullish

by Chris Pulver | Sep 25, 2026

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The latest American Association of Individual Investors (AAII) Sentiment Survey just dropped, and it’s showing something I find fascinating.

Bearish sentiment came in at 37.5% versus the historical average of around 31.5%. That’s a pretty high mark. Meanwhile, bullish sentiment has retreated to 32.7% compared with the historical average of 37.5%.

Here’s why that matters…

And why elevated bearish readings like this often act as a contrarian signal that the market has more room to run.

Why High Bearish Sentiment Often Supports Upside

Look, this isn’t something I’m positioning on exclusively, but it’s usually a solid contrarian indicator. If people are always looking for the crash, the crash, the crash — this market does not like to reward that.

The same goes for the opposite extreme. If everyone’s super bullish and focused on the rally, the rally, the rally — the market doesn’t tend to reward that either.

There’s a fine line here, and the market likes to go where the most pain will be felt.

We’ve said all year that the upside risk is very real, and we’ve seen it play out. The post-FOMC strength over the last couple of weeks is a clear example. With so many investors braced for weakness, the market ripped higher and forced bears to reconsider their positioning.

Until this bearish reading drops below 30%, it’s hard to want to be a full-on bear. Elevated fear doesn’t guarantee more upside, but it suggests plenty of skepticism remains in the market. That skepticism can become fuel if prices continue rising and defensive investors are forced to chase.

What This Means for Your Trading

That doesn’t mean the move will be one-way. The bears may regain control for a stretch and make the bulls uncomfortable. This is very much a two-way market where both sides are going to feel some pain.

That’s why you’ve got to trade what’s in front of you and manage risk accordingly. Sentiment is one input — not a standalone reason to enter a position, ignore price action or dismiss downside risk.

The takeaway is that when fear is elevated and investors are positioned defensively, the market often has a habit of doing exactly what the majority isn’t expecting.

Right now, with bearish sentiment running well above its historical average, that bias tilts toward continued strength — even if volatility makes both sides uncomfortable along the way.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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