The most recent release of the AAII sentiment survey shows that last Friday's drop on the 20th anniversary of the '87 crash seems to have struck a nerve with investors. Bearish sentiment rose to its highest levels since May.
The chart below shows the S&P 500 over the last five years. We also marked each occurrence where bearish sentiment exceeded current levels. While we would not place too much weight on the week to week changes in sentiment surveys, the chart shows that more often than not, the market has performed well following high levels of bearish sentiment.