Take a look at this column on Marketwatch by Mark Hulbert. His measurements indicate that the bearish sentiment shown by short term market timers exceeds even the levels attained at the 2002 lows in the US stock market and is at its most bearish reading in six years! And Nasdaq timers are even more bearish than this!
This simply amazes me. How can so many be so emphatically bearish when the S&P 500 is so close to its 2005 highs? More importantly, how can they possibly be right? You know my answer to the last question - they can't be right. And a big rally to new bull market highs is just ahead of us.
Along the same lines take a look at this column by Floyd Norris in today's New York Times business section. (Sad to say, you won't be able to access it without being a subscriber!). He observes that there is a remarkable amount of pessismism out there on the part of U.S. money managers and corporate excutives. Even consumers think that the next 6 months will be bad for the economy.
Both Hulbert and Norris give us evidence to back up the readings of the Rydex cash flow index which I last discussed here.
I think this situation will go down in the annals of contrary opinion as a classic case of heavy bearish sentiment completely unjustified by current events and eventually contradicted by a huge subsequent upmove.