The doom and gloom talk this weekend was at a fever pitch. It is very difficult not to get sucked in as all the arguments make perfect sense. It is often the case at bottoms that there are few reasons to buy and at tops there are often few reasons to sell.
Every sentiment indicator I look at except for the Investors Intelligence survey is showing extreme pessimism that typically leads to favorable returns. At almost every bottom and top there will be at least a single indicator that does not confirm it. That is why I believe one must look at the weight of the evidence. There are dozens of sentiment indicators I look and they all clearly support the upside save for the II survey.
I find it telling that the most often quoted sentiment indicator of late has been the Investors Intelligence survey. I find that when the crowd focuses in on a single indicator it usually fails, even if it is a trusty indicator. I believe that will be the case again this time around.