I'm not familiar with this in the specific context of spelling words, but my DD9 has exhibited this same behavior over a wide range of other activities. The activity may be different, but the context is the same... DD is convinced that she absolutely can't do something DW and I are fully confident that she can.
Our standard response is to encourage DD that we know she can do it, offer our support in helping her overcome her current challenge, and refuse to get caught up her emotions when she's melting down. Then, once the results come in, we make sure to say, "See, toldya so." Having that foundation of past success, DD finds new confidence. And, having that foundation of her parents successfully predicting her results builds her confidence in our assessments for other activities in the future.
So, in other words, I'd keep doing what you're doing.
If you're looking for ways to make spelling practice more fun, DW used to write each word on two index cards, then play memory matching with DD. DD loved it, mostly because she trounced DW every time (games with me usually ended in a tie).
