In 2025, we’re in historic territory for bearish sentiment.
We’ve now seen 14 consecutive weeks where AAII Bears have outnumbered AAII Bulls.
And it gets even more extreme with the AAII Bears, which have stayed above 50% for 11 straight weeks.
Here’s the chart:
Let's break down what the chart shows:
The red line in the top panel shows the number of consecutive weeks where AAII Bears > AAII Bulls.
The red line in the bottom panel tracks the number of consecutive weeks where AAII Bears have remained above 50%.
The Takeaway: This is a prolonged period of pessimism that deserves attention. We have seen 14 consecutive weeks during which the AAII Bears have outnumbered the AAII Bulls, marking the 5th longest stretch of bearish sentiment on record.
The extreme data does not stop there; we have also seen that for the past 11 straight weeks, the percentage of AAII Bears has exceeded 50%. This level of bearish sentiment has never persisted for this length of time before.
When sentiment is so one-sided for an extended period, the market often surprises the majority. Currently, these sentiment levels could serve as a tailwind for risk assets rather than a hindrance. While this doesn’t guarantee that we've reached the market bottom, it does suggest that any further bad news may already be reflected in prices, making upside surprises more likely.
In the past, extreme bearish sentiment like this has often coincided with major turning points in the market
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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