Sentiment among retail investors has been almost as bad as it was during the Great Financial Crisis, and that has triggered a reliable contrarian buy signal that points to a double-digit rally ahead, according to RBC. The weekly American Association of Individual Investor survey, which polled individual investors of their thoughts on where the market is heading in the next six months, has indicated a level of bearishness that’s close to the level during 2008, RBC said. “Depressed levels of retail investor sentiment are sending a strong buy signal for US equities again,” Lori Calvasina, head of U.S. equity strategy at RBC, said in a note. The strategist said the S & P 500 has climbed 15% on average in the 12 months after a threshold of negative 10% is crossed in its gauge, which looks at the four-week average of the Bull/Bear spread of individual investor sentiment. The gauge stood at negative 14.4% as of Thursday. Retail investors have been dumping equities in the face of raging recession fears that have been stoked by rate hikes and a banking crisis. Volatility remained elevated as regulators took possession of First Republic on Monday, resulting in the third failure of an American bank since March. The selling among individual investors reached a new milestone as of late. Retail investors had sold all of their single stocks (in the S & P 500 and Nasdaq 100 benchmarks) that they acquired in the pandemic as of November, and now they have sold more than twice what they bought over the past 15 months, Goldman Sachs estimated. — CNBC’s Michael Bloom contributed reporting.