If you're afraid of this market, you're not alone. According to stock lore and strategist Ryan Detrick of Schaeffer's, heightened fear makes this a great time to buy.
"If you look at overall market sentiment it is extremely dour," he says. Detrick ticks through the negatives: 2-year lows in Bulls in the AAII Sentiment Survey for the week ended 5/16, USA Today stories on Main Street's distrust of the market, and last week's "Out of Stock" equity elegy in the Financial Times.
In the options market, Detrick also sees a heavy skew towards puts in Schaeffer's proprietary measures, all leading him to the long side. "We're not saying buy everything," he states, but he is buying plenty of stuff.
The chartist is keying off the Russell 2000 (^RUT) and NASDAQ 100 (^NDX). Both recently tested levels Detrick thinks are meaningful at 750 and $60 respectively on the PowerShares QQQ (QQQ) -which tracks the NDX- represented serious resistance for most of 2012. It's also exactly half the all-time highs for the ETF, reached in 2000.
"We've found half highs can be very strong buying opportunities," Detrick says. "We've done studies that say historically year-to-dates and half-highs do have some significance kind of under the radar. It makes sense to us to start accumulating here."
A good technician needs his stops. Detrick says the the S&P 500 has three supports lurking just below current levels. "If we go three to four percent lower than where we are currently and break those lows at 1291 just two Fridays ago that's where we'd say 'okay, maybe let's take a step back.'"
Until then it's time to buckle up and buy stocks.