The rough week in the stock market has, by some measures turned into a full-fledged bear. The average stock in the S&P 500 is down more than 20 percent from its 52-week high, according to Bespoke Investment Group. In all, 262 of the S&P 500 companies are off 20 percent or more from their 52-week high.
Not surprisingly, investor confidence is at new lows, too, according to the latest survey by the American Association of Individual Investors. Bearish sentiment, measured by the number of respondents who believe the market will fall in the next six months, jumped to 45.5 percent last week, the highest since April 2013. That compares with just 23.6 percent in the last week of 2015.
The good side to all this? Bearish investor sentiment tends to be a contrarian indicator - when individual investors start running for the exits, the smart money moves in.