Back in March we asked "what happens when this chart goes to zero" with regard the exuberant lack of bears in the AAII survey [3]. The last 3 months have seen that sentiment morph into actual positioning as institutional investors have been net sellers of US equities since April [4] leaving assets in bear funds at record lows.
[5]
As FBN's JC O'Hara notes, it's a sign of capitulation when there's no one left to bet on a decline... and remember margin has already rolled over... meaning the levered longs are unwinding too...
[6]
Charts: dshort.com and FBN