This blog post originally appeared on RealMoney Silver on Feb. 11 at 7:49 a.m. EST.

I am getting nervous about being too short.

What concerns me are some sage observations from investors/analysts I have learned to respect coupled with my continuous analysis of the investment backdrop (a.k.a., the pit in my stomach that sometimes serves as my third investment eye).

The emerging technical signals are starting to suggest that the bear market may be long in the tooth. Indeed, we might have already successfully tested the lows during the Socgen market bottom two weeks ago. Not only are the number of new lows lower in the recent test but, as RealMoney's Helene Meisler reminded me on Sunday, "the cumulative advance/decline line did not make a lower low and neither did the cumulative volume or the McClellan Summation Index."

Moreover, Helene adds that "it's the SOX semiconductor index; something's going on here. No one likes them. No one owns them anymore. They have stopped going down for the first time since spring 2007, and the SOX started to outperform the Nasdaq on Jan. 11."

As far as sentiment is concerned, the negativity bubble continues to build as many excessively optimistic observers have begun to recognize, admit and chronicle the emerging economic risks. Even Dr. Arthur Laffer has turned negative on the U.S. economy, and my friend/buddy/pal, Sir Larry Kudlow, has retreated from a bullish short-term stance in favor of the argument that "stocks are attractive over the long run." And even Ben Stein wrote in the New York Times yesterday of the "near ruin of the immense banks."

Meanwhile oversold readings are ever-rising - whether measured by oscillators, stochastics, put/call ratios and/or other technical indicators.

On the fundamental front, someone I really respect who (at one time) was one of the premiere strategists on the Street -- I haven't gotten permission to use his name, and I believe he prefers anonymity -- makes the point that he assumes an ever-steeper yield curve coupled with the term auction facility should serve to heal credit contraction and moderate the contraction of the securitization market. He expects, as I do, below-trendline economic growth to around 2% over the next several years and for inflation to stay benign. He adds, "This is not at all a poor environment for stocks."

One of my investment icons also chimed in this weekend -- again, I haven't received permission to use his name, and I believe that he, too, prefers anonymity. He reminds me of the proportionality of investment cycles and puts the current cycle in its proper perspective. He relates that the piercing of the housing bubble is so pronounced because the upside was so exaggerated.

The same observation applies to previous market excesses (e.g., the 70%+ drop in the Nasdaq earlier this decade, which followed the bubble of the late 1990s). As well, the speculative private equity market is no more and has been completely shut down.

By contrast, in this cycle, equities were never as exploited as other speculative phases: Price-to-earnings multiples remain low relative to inflation and interest rates; they were never really exploited. Moreover, stocks have already dropped by over 19% (from peak to trough), compared to average bear market declines of 20% to 25%. Meanwhile, corporate liquidity remains healthy.

In summary, this investment rabbi concluded to me over the weekend that, even if the economic downturn does prove to be worse than is generally expected, it will occur within the context of an already undervalued market.

As most recognize, I have been moving in the direction of being more optimistic over the last few weeks. On Feb. 1, I expressed a less ursine and more balanced tone, citing that the market negatives only slightly outweighed the market positives.

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