NEW YORK -- Bull markets, the old saying goes, are built on walls of worry. And this bull market seems to be no exception. Measures of market sentiment had shown such bearishness before the most recent rise that some analysts had forecast that stock prices might soar.
But even as the market was beginning its rise, one widely watched analyst, Steve Leuthold of the Leuthold Group, was warning that an indicator of long-term price trends had turned negative for the first time in more than a year. If that indicator is correct, the bull market could be nearing an end.
The explosive rise in stocks that began on April 9 and continued through last week followed a period in which options traders, as a group, became as negative as they had ever been. That intense increase in pessimism came amid indications of a faltering economic recovery and the rapid fall of Japanese stock prices.
Don Fishback of the Investment Research Institute in Cincinnati said there was a "pervading sense of doom among small speculators, a group notoriously wrong in their market expectations."
An indicator noted by Mr. Fishback and his associate, Bernard G. Schaeffer, was that odd-lot short sales had "picked up enormously." Trading in odd lots -- fewer than 100 shares -- was once watched intently as a sign of what individual investors were up to, but now is usually ignored because most investors trade in round lots of at least 100 shares. Still, it provides a look at what small speculators are up to, and it had grown rapidly in recent weeks.
Those signs of negative attitudes come from trading by the small minority of investors who actively try to time the stock market and to bet on rapid moves. As Mr. Fishback noted, as a group such investors are often wrong.
Certainly, the pessimism that was pervasive only a couple of weeks ago has been wrong since then. During the six trading days from April 6 through Thursday, the Dow Jones industrial average rose 5.8 percent, and 90 of the stocks in the Standard & Poor's 100-stock index showed gains.