(Dow Jones) There's been a lot of talk about how bearish everyone is, and how bullish that is for the stock market, but so far that's all it has been--a lot of talk and not much action.

Extreme negative sentiment is seen as a contrarian indicator because once a short position is initiated, the next move is to either to buy on a dip to take profit, or after a gain to stop losses from growing. But the contrarian argument is based on the assumption that bears will go short. While sentiment is negative, there is very little evidence that enough bearish bets have been placed to limit the downside, or push the market higher.

Equity mutual funds have experienced outflows for 19 straight weeks, according to TrimTabs Investment Research, and a recent survey of hedge fund managers showed that 47% were bearish and only 17% were bullish. TrimTabs' Demand Index, a contrarian indicator based on a number of money flow and sentiment variables, is in "very bullish" territory at 82.9. Readings above 50 are considered bullish.

Separately, the McClellan Market Report said some of its favorite sentiment indicators, such as asset levels in certain leveraged index funds and the ratio of total equity option volume to the volume of index options, are showing "bottom-worthy" levels of investor pessimism. The Report said the latter ratio falls when sentiment is negative because index option volume tends to rise when traders are nervous.

But despite all that bearishness, investors haven't made a lot of bearish bets.

One might expect worried investors to buy a lot of downside protection, which would lift volatility and volume on puts, or downside bets, relative to volume on calls, or upside bets. But they haven't.

The CBOE Market Volatility Index is just above levels seen in late April, even though the S&P 500 Index closed Thursday more than 9% below its April closing high of 1217. And Miller Tabak chief technical market analyst Phil Roth said recently put/call volume ratios are at neutral levels, and are not showing "the excessive trader pessimism usually evident near important lows." Rather than get short, bears have moved to the sidelines.

Volume was expected to pick up after Labor Day, but New York Stock Exchange composite volume has been lower than last Friday's volume every day this week. TrimTabs asked simply: "Is There Anybody Out There?"

Just like how the "flash crash" in early May sent bulls into hiding, perhaps bears have been reluctant to get short because the S&P 500 surged 11% from the July 1 low to the Aug. 2 high even though they had bearish fundamental and technical inputs on their side. NYSE short interest fell in late July to the lowest level seen since January.

What that means is bulls shouldn't expect negative sentiment alone to propel the market higher. They will need real positive catalysts, like improving economic data, to get the market moving.

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