According to Birinyi Associates' most recent bottoms up analysis on the S&P 500, a consensus of analysts covering those stocks expect the market to rally over 31% within the next year. (This is calculated as if every stock were to reach its respective price target within the specified time - usually 1 year or 6 months.) Anyone who has been watching stocks over the last 6 months probably knows, not thinks... knows, that Google (NASDAQ:GOOG) for example will not rally to 620 within the next year.
Analysts are historically bullish on their stocks. US Steel (NYSE:X), for example, is trading at an estimated P/E of 2.7. With the stock down 53% year-to-date, the people trading it obviously do not agree with the analysts. Earnings season begins tomorrow. We would not be surprised to see a string of estimate revisions and downgrades as these companies come closer to reporting. With that in mind, market bottoms are sometimes associated with extreme negative sentiment.