Retail Traders Are Panicking—Are They Making a Huge Mistake?

The latest AAII Investor Sentiment Survey just dropped, and it’s telling us one thing loud and clear:

Retail traders are more bearish now than they’ve been at any point in the last year.

Historically, when bearish sentiment hits extreme levels, it’s not the start of a crash—it’s usually the moment smart money starts buying.

So why is everyone so afraid?

The Market is Holding Strong—Despite the Panic

The S&P 500 and NASDAQ are within 2% of all-time highs regardless of the extreme bearishness held by retail traders and investors.

Over the past few weeks, we’ve seen three major “market-ending” events:

📉 The DeepSeek panic was supposed to end the AI boom and destroy Semiconductors.
📉 The new tariffs were supposed to crush emerging markets and send the U.S. dollar soaring.
📉 Hot CPI and PPI prints were supposed to restart the inflation panic and wreck stocks.

But guess what?

✅ Semiconductors and Tech have ripped higher since the Monday gap down.
✅ China, Mexico, and Canada are all outperforming the U.S. since the tariff announcement.
✅ The dollar is down, and the S&P 500 & NASDAQ barely flinched at inflation fears.

So, Who’s Buying the Dip?

If retail traders aren’t buying, how are the indexes still hovering near all-time highs?

Maybe because institutions and large money managers aren’t worried about DeepSeek, tariffs, or inflation.

Maybe because retail traders, who are almost always wrong at the extremes, are handing over their shares at the exact wrong time.

But What If Retail Is Right?

If retail is correct this time, and the largest market participants in the world are wrong, then we need to be looking for stocks to short.

That’s exactly what we’ll be covering today at 11 AM EST in our Bear Tracks Report—a free webinar where we go through the weakest stocks in the market right now.

📍 Join us live on YouTube →

See you at 11AM EST!

Hamilton