Here are two more reasons for believing that there is an historically high level of bearish sentiment in today's stock market.
The first chart above this post comes courtesy of the New York Times and appeared in Saturday's business section column "Off the Charts" by Floyd Norris. It shows that for the first time in 20 years more than 50% of the respondents to the Conference Board consumer confidence survey expected stock prices to decline over the next 12 months.
The second chart shows the bullish and bearish percentages reported in the Investors Intelligence weekly survey of investment newsletters. The latest reading was 50% bears, the highest bearish percentage in 14 years.
I don't believe the market averages will drop very much from here given the extreme levels of bearish sentiment we see. The next big move in the S&P will be upward to 1500 and eventually much higher than that.