S&P 500 is at all-time highs, yet retail sentiment remains outright bearish. The AAII Bears indicator has stayed above 40% for 6 consecutive weeks.

AAII Bears is the share of individual investors in the American Association of Individual Investors survey who expect the market to decline over the next 6 months. Essentially, it's a pure measure of retail fear.

Price refuses to fall, even though the crowd still acts as if another wave of selling lies ahead. In similar past episodes, the S&P 500 was higher 3 months later every time. The average return was about 7%.

Distrust of the rally prevents the market from overheating quickly. As long as the crowd continues to doubt, the bullish trend has fuel. Markets die in a state of euphoria, not distrust.