One useful sentiment indicator that I like to use as a check on my own assessments is Mark Hulbert's stock market newsletter sentiment index which he has been constructing since 1997. It measures the average portfolio allocation, long or short, to stocks by the market timing newsletters Hulbert follows. You can read his latest commentary on this indicator here.
According to Hulbert the index is currently at - 35.9 %, the lowest reading in almost 8 years and in particular a lower reading than was seen at the bottom in March and at the bear market lows in 2002. The fact that market timers advocate a record setting net short position is a very bullish omen and reinforces the observations I made yesterday.