“If everybody is thinking alike, then somebody isn’t thinking.” General Patton
The quote above is one I use all the time and I’d put it at my second most used quote, after Mark Twain’s “History doesn’t repeat itself, but it often rhymes.” While our team remains constructive on this bull market and we don’t see any signs a recession is on the horizon, worries have increased with the war, higher yields, and soaring oil (and other commodities).
I started my career more than two decades ago trading options and many of the lessons I learned way back then I still use today. Specifically, if everyone is talking about something or feels a certain way, the market has that priced in and the opportunity is to fade the crowd. This is way easier to say than to do, but some of the best calls I’ve made in my career were going against the crowd. We did this last April when markets were crashing and people I hadn’t heard from for years were reaching out to me, telling me how bad things were and how our economy was toast. Our team was openly mocked and disparaged for explaining back then that a LOT of bad news was priced into things and any good news at all could spark a historic rally. Of course, the worst of the worries didn’t happen and stocks soared more than 40% from the April lows until the late October peak.
Fast forward to today and in many cases we are seeing levels of fear and pessimism consistent with past major stock market lows. The obvious driver would be some type of better news or resolution with the war in Iran, but with so many investors and hedge funds positioned for more pain, the true pain trade would be to see higher stock prices.
Here are 11 reasons sentiment says to remain bullish.
1) The CNN Fear & Greed Index is firmly in extreme fear.
Source: CNN Fear and Greed Index
2) The Economist just had this doozy of a magazine cover. We don’t blindly invest in magazine covers, but over-the-top covers like this historically can be a contrarian signal, especially when you see red arrows pointing lower.
3) The American Association of Individual Investors (AAII) Sentiment Poll has seen more bears than bulls for four weeks and the number of bears has spiked to the highest level since mid-November.
4) The National Association of Active Investment Managers (NAAIM) Exposure Index hit the lowest level since last April.
Source: NAAIM Exposure Index as of March 12, 2026
Those first four were examples of what we call soft sentiment (survey-based data). We pay attention to that, but we put more credence in hard data—what investors are doing with their actual money. Fortunately, we are seeing a lot of hedging and outright panic when we look at this too.
5) Last week saw the largest one week drop in Asset Managers’ net positioning (by dollar value) since the Covid crash. Nice chart from @subutrade.
Stay on Top of Market Trends
The Carson Investment Research newsletter offers up-to-date market news, analysis and insights. Subscribe today!
"*" indicates required fields
6) The Bank of American Global Fund Manager Survey saw a six-month low in investor sentiment.
7) Another sign that investors are running away from equities here—last week saw outflows from equity ETFs, something that rarely happens and that hasn’t been seen since April of last year. Todd Sohn, Chief ETF Strategist of Strategas and ice cream connoisseur, shared this incredible chart.
8) Goldman Sachs data showed a historic jump in ETF and index shorting last week, in line with some of the largest jumps ever.
Source: Both Charts Are from the Goldman Sachs Flow Deck as of March 16, 2026
9) Last Thursday saw continued worries about private credit and the potential fallout. As a result, Bank of America data showed record outflows from financial funds.
10) Call-Put skew is showing off the charts demand for put protection relative to calls. When everyone wants insurance and will pay nearly anything for it, it means a lot of bad news is likely priced in and as you can see below, previous negative spikes like this have occurred near market lows. If you want to learn more about option skews, here’s a great writeup from our friends at Investopedia. Shoutout to @MacroCharts for this one.
11) Here’s another gem from Macro Charts, this time showing the ETF volume of short ETFs has hit the highest level EVER.
In conclusion, worries have spiked recently, but I’ve done this long enough to know that when we see various clues that sentiment is getting extended, fading the consensus is the way to go. Thanks as always for reading and for our latest thoughts on the war, economy, inflation, and sentiment, please be sure to watch our latest Facts vs Feelings below.
For more content by Ryan Detrick, Chief Market Strategist click here.
8829441.1. – 18MAR26A
