Surveys of the bullishness or bearishness of investors and advisors make for excellent contrarian readings at extremes. On one hand, excessive bullishness can indicate that buying pressure has peaked and that the risk of a negative surprise is heightened. If pervasive bearishness among investors exists, even bad news won't necessarily cause the market to go down any further since the selling has already occurred in advance of this news. Investors Intelligence and the American Association for Individual Investors (AAII) are 2 of the major sentiment polls.

Investors Intelligence is a survey of sentiment taken of investment advisors on a weekly basis. The results are reported as percent bullish, percent bearish, and the percent that are expecting a correction. This sentiment poll can be found at InvestorsIntelligence.com.

As can be seen by the chart above, peaks in bullish sentiment often precede drops in the market, while peaks in bearish sentiment can often precede a market rally.

The AAII (AAII.com) polls individual investors to gauge whether they are bullish, bearish, or neutral.

In addition, these polls are available each week in Barron's, and the latest Investors Intelligence poll is updated weekly in Investor's Business Daily.