Bullish signal for the year end?

I have been talking risks in general for a couple of months since the summer. Honestly I have expected to see a 10% correction or more by now. But S&P 500 is up 17.7% for the year and Nasdaq is up 15.8% by now. Any corrections yet? Ya, this week may be considered one with a 5% dip at its worst, but only on the intraday basis. If on a closing basis, we are only talking about a 3% dip from its recent peak.  

So the market should be pretty happy, right? Well, just the opposite! The most recent weekly survey by the American Association of Individual Investors (AAII) showed that bullish sentiment sank 16.4 points to 22.4%, one of the fastest drops in history. Bullish sentiment hasn't been this low since July 29, 2020 - the period following the coronavirus crash. Meanwhile, bearish sentiment rose 12.1 points to 39.3%. That marks the seventh week of the last nine that pessimism has exceeded the historical average of 30.5%.

The here is the Fear & Greed Index

While we haven't seen a real substantial market correction or crash yet, investors sentiment has dipped to the extreme bearish grade for a mere 3.9% pullback in the S&P 500 from its recent highs. Gosh! 

As a contrarian investor, I have to view the market sentiment inversely. It seems to me somewhat a bullish signal that we may have seen the worst, or close to the worst for this year's correction by now. After all, we have been mostly through the worst month of a year and we are going into the more bullish season very soon. With the extreme bearish sentiment seen right now, accompanied by the more positive seasonality, I must say we probably should start to look for more upside than downside soon. I don't mean we cannot see another mini crash in the very near term but I think the market is setting up for a bullish year end as a whole. 

A quick final note: tomorrow is a wildcard day as the Fed meeting announcement will be made at 2 pm, followed by Powell's news conference. How the market will react is anyone's guess. Given the already very bearish mood seen in the market, I guess Powell may try to talk up to calm down the jittery market.