As I’ve stated in a recent episode (#465) of the Wealthsteading Podcast, I think negative investor sentiment has gotten too exaggerated, and this could likely be a contrarian indicator that the stock market selloff has bottomed.
Note the chart below. Negative investor sentiment has spiked to an historic extreme. It’s worse than during the depths of the pandemic, and on par with the post-pandemic inflation fear selloff. Also note that although sentiment is at a peak, the index is trading above its 200 day moving average.
That’s an extremely encouraging sign and likely a reliable contrarian indicator.
While I’m not happy about the recent pullback, I’m also not worried about it. The tariff uncertainty driving the panic is entirely SELF-INFLICTED chaos that can be instantly corrected.
Always remember my mantra: Markets adjust, people adapt, and stupid policies get corrected…eventually.
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