Chart of the Day - Tuesday, May 27, 2025

🏆  Today's Chart of the Day was shared by Ryan Detrick (@RyanDetrick).
 

• Sentiment is finally normalizing after a rare and extended stretch of pessimism toward stocks. According to the latest AAII Sentiment Survey, bulls outnumbered bears for the first time in 15 weeks.
   
• Ryan notes that the S&P 500 has historically posted strong gains following similar sentiment resets. There have been only eight prior instances since 1990 in which bears dominated for three consecutive months or more.
   

• With the lone exception of 2008, the S&P 500 was higher 6–12 months later every time. On average, the index gained +8.2% over the following six months—roughly double the typical return over that timeframe.

   

The Takeaway: When persistent pessimism finally fades, it often marks the beginning of a sustained move higher for stocks.