A rare warning signal just reappeared in the market — and the last time it showed up, the S&P 500 index plunged more than 20% in a matter of weeks.
According to the latest AAII Sentiment Survey, the bull-bear spread has collapsed to just 0.3%, the lowest since September 2022 — right before the S&P logged its steepest drop since the 2008 financial crisis.
That signal comes as bullish sentiment drops to 39.3% and bearish sentiment surges to 39.0%, a near-perfect split that reflects deep investor indecision. Neutral sentiment, meanwhile, remains depressed at 21.8%, well below its historical average of 31.5%. This extreme polarization often sets the stage for outsized volatility.
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