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"The spike in pessimism follows the S&P 500's worst week in nearly two years and suggests some investors believe the market's upward momentum is being interrupted," Charles Rotblut, vice president at AAII, said in a narrative accompanying this week's survey. "Also playing a role in the backdrop are concerns about prevailing valuations, heightened geopolitical tensions, slow economic growth and frustration with Washington politics."
While the AAII survey takes the pulse of the retail crowd, professional investors aren't so happy either, though their level of pessimism is a good deal less.
The latest survey from Investors Intelligence registered bullishness of 50.6 percent, easily outnumbering the 17.1 percent calling themselves bears regarding near-term market action. However, the decided weighting in favor of optimism is a little deceiving.
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As recently as mid-June, bullishness on the survey, which polls investor newsletter editors, stood at a lofty 62,6 percent. Bearishness was 16.2 percent just a week ago.
"The bears continue to point to the removal of Fed support, building technical divergences and now the potential impact on world trade of the increased sanctions against Russia," said John Gray at Investors Intelligence.
Most of the bull crowd moved to the correction camp, with 32.4 percent now expecting a 10 percent market drop ahead.
Of course, sentiment surveys generally are of most use as contrarian indicators—so when sentiment gets too heated to one side, it's best to move the other way.
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Bank of America Merrill Lynch strategist Savita Subramanian, in fact, indicated in a note that the Street's bearishness is indicating a "buy" signal.
BofAML recently reported heavy bearishness on Wall Street, with its survey of investment strategists showing just a 50.8 percent portfolio allocation to stocks, against the traditional 60 percent to 65 percent. That's well within the contrarian parameters the firm uses to denote a buying opportunity.
Investors Intelligence also is telling clients to buy, saying its proprietary indicator shows a market that is "deeply oversold," causing the firm to "cover shorts and take advantage of the sell-off to populate our long book."
Market direction, however, has reflected investor sentiment. The S&P 500 is down 3.3 percent over the past month and the Dow industrials have lost more than 1 percent year to date.
—By CNBC's Jeff Cox