It is very hard to be a bear on a day, despite a 131-Dow-Point drop and solidly bearish indicators, when you read this stuff:
- Fund managers took the most negative stance on equities for a decade in June amid worries about the potential impact of stagflation, Merrill Lynch's monthly fund manager survey showed.
- Morgan Stanley warns of 'catastrophic event' as ECB fights Federal Reserve
- U.K. bank's (Royal Bank of Scotland) strategist warns of stock market crash
It is very rare that sentiment this terrified results in a negative market. I remember back in July 2006 when the market appeared to be tumbling hard that sentiment was too bearish. The result was a huge multi-month rally. It was pretty bearish in January of this year, too.
Sentiment is a very tricky game. But is the market already too fearful?
I'm just sayin'