The Bull Case: Part Two

The bull case that I have heard repeatedly recently is that market participants are too dire, with talk of a Hindenburg omen and a double dip. Contrarily that means the market will not go down. That is exactly the type of argument that I like to make but there are a number of things bothering me about this argument:

• There are too many people making this argument. In early July I was screaming this argument from the rooftops and nobody wanted to hear it. Now suddenly everybody is a contrarian. 
• It takes time for people to actually sell their stocks even if the mood has suddenly changed and that is why I like to use the oversold readings. Not enough time has passed for people to act on their new found bearish feelings. I would feel comfortable with this argument if more time had passed.
• The economy is bad and getting worse. While it is better that people recognize this and price it in, a bad economy in and of itself is not a good thing.
• We are at the time of the year that sentiment often reaches an extreme and this is not extreme. 

While I respect this argument enough not to short the market, the bulls have not convinced me.