As you know I believe that there is way too much bearish sentiment about the stock market in the US to permit a substantial drop on prices.
Above this post you will see a chart of the Rydex Cash Flow ratio, courtesty of Decisionpoint.com. During the past four years, everytime the blue line dropped to 0.90 a substantial rally ensued. This is a reason for thinking the S&P will rally from here.
Along the same lines check out this column by Mark Hubert on Moneywatch.com. Hulbert finds the sentiment of market timers currentyly very bearsh, especially on the Nasdaq.
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