Michael Metz: negative sentiment is bullish (1990)

The market has held up remarkably well in the face of a barrage of bad news.  We've had the collapse of the savings and loans, the Campeau bankruptcy, the fall of Drexel Burnham Lambert Inc., the big write-downs of the New England banks, fear of poor earnings and the disaster in the Japanese market.  And yet the American market doesn't go down.  I think the market is telling us everyone has already assumed the worst and (that) the majority who want to sell stocks have done it.  It's an overconfident market that is vulnerable.  This is not an overconfident market.

I expect the Dow to make a new high soon.  And later this year I look for the Federal Reserve to easy monetary policy and a stampede of buying to set in , driving the Dow well over 3000 on expanding volume.

~ Michael Metz, "With Sentiment So Bearish, Stocks May Rise," Investor's Daily, April 9, 1990

(At the time, Investor's Intelligence survey showed 45% of investment advisors bearish and 43% bullish.  Equity mutual fund cash levels were at 11.5%.)