But I thought about that afterward, and the funny thing is I like to be a contrarian. Because the majority of the time, the majority of market players are bullish, and I find myself arguing the other side. I suppose this makes me lean toward the bearish camp.

In the past few days I have stated several times that I am now in the consensus camp because so many folks are looking for a high in September. So I took a look at a period when the bears were right, a comparison I think you'll find fascinating.

Specifically, I looked at the Investor's Intelligence readings from the early 1970s, specifically 1973-74. From March 1974, the DJIA traded between 846 and 800, roughly a 5% range. In that same time frame, the percentage of bearish newsletter advisers rose steadily from a low of 27% to 60%. The DJIA finally broke 800 in July 1974 year; by then, the bears were already at 60%. They climbed further to a peak of 69.6%.

In other words, the bears were right. And look at how they stayed bearish for the whole decline.

The current reading for the percentage of bears is quite high at 34.7%, although it is well off its peak reading of a few weeks ago. But note that it has been in this mid-30s range since mid-June.

When folks ask me, as they often do, where sentiment is now, I must report that it is bearish. It has been bearish and it has not changed. Yet all those bears haven't helped the market rally longer than a handful of days at a time.

Perhaps there are too many bears out there. Perhaps all these bears will lead to a lasting rally one day, but all those bears didn't help the market in 1974 and so far it hasn't helped the market since June.

When I see the number of stocks making new highs increase and volume increase along with it, I will be happy to jump into the bull camp. But for now I continue to be part of the bear consensus.

Overbought/Oversold Oscillators

For more explanation of these indicators, check out The Chartist's primer.