Investors are fearful now, but for stocks to rally they'll need more pain. It's coming.

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OPINION: The stock market’s bottom won’t come until sentiment indicators paint a picture of extreme bearishness — and stay there for several days at a minimum, columnist MktwHulbert writes.

This sobering prospect emerges from a contrarian analysis of stock market sentiment. Currently the “wall of worry” that markets climb is too flimsy to support much of a rally.

It’s a good bet that at the final bottom of the market’s current correction, far fewer on Wall Street will be insisting that we’ve seen peak bearishness. Last month was one such occasion. There has been no trading session since March 15 in which both the HSNSI and the HNNI were in the bottom 10% of their respective historical distributions. It’s been three weeks since either one was in its bottom decile. This is hardly a picture of peak bearishness.

What peak bearishness looks like To paint a picture of what peak bearishness does look like, consider the bear market bottom in March 2020. As I pointed out in a column three weeks ago, on the day of that low both of my firm’s sentiment indices had been in the bottom deciles of their historical distributions for eight of the prior nine trading sessions. A the March 2009 bottom, these two sentiment indices had been in their bottom deciles for 17 straight market sessions.

 

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MktwHulbert Shorting is winning . Biden created a black hole for American economy , correction Democrats did . Their 100% freebies led to inflation / recession. 401K for retirees is diminished. November should be a landslide . Democrat Senators are accountable.

MktwHulbert Nope even then it still won’t matter. The truth is uglier then the fear now

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