Markets opened strong, then rolled over and went negative.
If you were a pure contrarian, you would think that sentiment readings were a good — albeit historically early — buying signal. The last time we were this negative was in 1980, and we were pretty close in 1990-91.
I take that as signal to look for what can be described as a low risk, high return buying entry point some time over the next two years.
Source: Haver Analytics, Merrill Lynch (June 13, 2008)
This does not mean there won’t be moves up and down between now and then, or there won’t be other buying opportunities over the next 24 months.
However, if you are looking for a 1980 type of a start of the new Bull Market, sentiment is suggesting we could see one in that time frame.