Investors haven't been this scared of the stock market since the shock of the 9/11 attacks, Bank of America says

Bank of America's most recent global fund manager survey shows that investors are becoming more bearish on the stock market.

The average cash levels of investors have not been seen since the September 11 terrorist attacks.

"As recession concerns strengthen, investors reverted to cash, increasing average cash balances to 6.1% in September 2022, highest since October 2001 and well above the long-term average of 4.8%," BofA's Michael Hartnett said.

According to the survey, a record net 60% of investors are taking lower-than-normal risk, while stocks are at a record underweight. Less than 20% of respondents to AAII's most recent investor survey were optimistic about the stock market over the next six months.

Wall Street analysts believe that bearish investor sentiment serves as a reason to believe that the stock market has more upside ahead as rising stock prices slowly win over reluctant investors that have been sitting on the sidelines in recent months.

According to BofA, the extreme bearish sentiment readings don't mean the time is right to buy stock.

While the short-term pain trade is up, a combination of benign data and bearish sentiment means the S&P 500 could test resistance at 4,300.

According to BofA, global growth expectations are near all-time lows. There are three biggest risks to the stock market.

August's higher-than- expectedCPI report led investors to expect more rate hikes from the Fed while questions swirl around Russia's potential response to a successful counterattack launched by Ukraine.

The S&P 500 fell more than 3% on Tuesday.