Extremes in investor sentiment were seen over 2 months ago while the high in prices was seen 5 weeks ago. Often times, indicators of investor sentiment precede moves in the markets. After all, the markets represent the collective opinions of its participants. At present, investors are viewing the markets unfavorably, but their opinions are by no means extreme. In the absence of bearish extremes in sentiment, I would expect equities to remain under selling pressure.
"A -21% sequential decrease in the number of sellers and the highest number of buyers since the week before Thanksgiving 2010 pushed market-wide sentiment to its best level in seven weeks. Sellers still outnumbered buyers more than 2-to-1 and all of metrics show sentiment worse than the 52-week average, but it was obvious that the market's downward move pushed some sellers to the sidelines (especially at S&P 500 companies) and brought out buyers (specifically at Russell 2000 companies)."