What sentiment gauges are you looking at? The ones I follow-- which are tied to what participants are doing with their dollars, not what they're saying-- are still wildly bullish. So far the market has completely ignored the storm clouds gathering on the horizon.
Obviously I'm not talking my position (I'm short) but just by virtue of the fact that almost every post on this thread is bearish, is the kind of negative sentiment we're talking about. AAll fund manager survey released Thursday showed the % of bearish manager's at 27.3 which is up from 19.3% in early August. Granted that # may have already turned lower after a 25+pt SPX rally, but the point is MANY traders think this stuff turned last month and it just ain't following form. Please site any bull frenzy that you see. In the past 48 hours, my mother, my girlfriend, and my gf's best friend have all remarked how "the market should go down." Believe me, none of these three broads is ever going to be profiled in a Market Wizards edition. I'm going to run a poll on ET tonight. Answer it honestly and we'll see how it goes.
My $0.02 (hey that reminds me, where is mtc ?): Its a Goldilocks market right now. Not too optimistic, not too pessimistic. Back in early August it was much clearer that optimism ruled. Now, I'm notsure. Pretty much all the technical, sentiment, and breadth stuff I look at all say, meh.
I agree with the first post, the bears are in for a rude awakening in October. Despite the bearish overtone this year and high oil prices, the market has held up pretty well. My personal opinion is that oil prices will begin to decline as refineries come back up and the continued slowdown of oil consumption in China. We'll know when october comes, I suppose.