Consider the average recommended domestic equity exposure among a subset of short-term stock market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). This average currently stands at minus 6.6%, which means that the average short-term stock market timer is actually recommending that his clients allocate 7% of their equity portfolios to shorting stocks.
...In addition, market timers who focus on the Nasdaq market in particular -- and who tend to be an especially volatile bunch -- are even more bearish right now. Their average exposure now stands at minus 50%, which means that they're now allocating half their equity portfolios to an aggressive bet that the market will continue declining.
Could everybody be right? It has happened, but betting with the crowd when there is such a strong consensus will lose one money over time.