Never mind what they say, watch what they do.

You could argue that’s the right approach to assessing the American consumer. Marquee measures of household sentiment remain very subdued across the world’s largest economy and yet consumption hasn’t really faltered. (Not that we’d know. The government agencies tasked with running the numbers are shuttered.)

Some of the ostensible consumer “resilience” is a manifestation of the “K-shaped” economy, wherein the well-to-do are emboldened to spend by enormous paper gains on their equity portfolios. Indeed, that interpretation was supported by October’s University of Michigan release, which showed sentiment for the top tercile of stock holders continuing to diverge from the mood among those who own no stocks.

But I think it’s fair to chalk up some of the disparity between word and deed to the idea that people are going to say “everything sucks” no matter what. That predisposition to depression is a fixture of the American psyche, and indeed of Western modernity more generally (see “The Great Depression” and “Doomscroll“).

If everyone acted the way they feel in America… well, suffice to say the country would be in even direr straits than it’s already in. And stocks would probably be lower. The figure below shows net individual investor sentiment tumbled back into negative territory after three weeks during which professed bulls outnumbered bears.

Note that the 22.6ppt drop circled in yellow is among the largest in years (the chart shows the spread itself, the change I’m referring to is the difference between last week’s +10.2% reading and this week’s -12.4%). Just as notably, it negated one of only three prints above the long-term average on that key measure of individual investor sentiment this year.

The AAII bull-bear spread has spent 34 of the last 37 weeks below its historical mean, which is to say the “net mood,” if you like, among retail investors has been worse than average more or less every week since Donald Trump returned to the Oval Office.

Fortunately, retail investors aren’t behaving consistent with their apparently dour mood. Quite the opposite in fact, according to Citadel’s data.

As the figure on the left, above, shows, retail’s “bullish conviction” — as measured by options skew (calls to puts) — stretched into a 24th week midway through October, matching the longest such bullish streak in Citadel’s series.

According to the firm’s Scott Rubner, retail activity tends to pick up from a September nadir into year-end, as shown on the right. November, he remarked, is typically “the strongest month of the year.”

Oh, and in this week’s AAII survey, nearly 55% said stocks are overvalued, around the same share of “pros” who said something similar when asked to assess valuations for this month’s BofA fund manager poll.