One of the best measures of sentiment is the Trin also known as the Arms Index. Currently the 21dsma of the NYSE Trin is higher than at the 2002/2003 lows. I have seen some people interpretating the high Trin readings as bearish for the market just as they were doing at the 2002/2003 lows. I recall asking EWI a question about it at that time and they basically blew it off saying that the ew pattern was the most important consideration. They were wrong then and I believe they are wrong now. Until we see a true break of recent support, it is my opinion that the current high levels of bearish sentiment will provide a floor under the market. Even this morning there was an analyst on CNBCs website calling for a crash. How many called the crash leading up to and after 9/11? How many called the crash in 2002? And how many called the crash in 2008? Where were these guys then? Now they are everywhere.
According to a recent news article, humans generally only remember events from the past that confirm their present beliefs. Perhaps there were alot of people calling for crashes back then. I just don't remember it. They certainly are calling for one now.