It sounds counter-intuitive but the sheer level of fear and complete lack of confidence inequity markets throughout the world actually provides support. To give you an idea of how far expectations have fallen, here are a few sentiment indicators:1. Bank of America Merrill Lynch (BAML) may have sounded a contrarian bottom in equities relative underperformance. Take a look at the banner headline pictured.In their recent report, analysts note how Wall Street strategists have essentially thrown in the towel on equities and slashed their recommended equity allocations to the lowest level in 15 years.This is a pretty solid long-term contrarian indicator. In fact, sell side strategists are now more bearish on equities than during the heart of the financial crises! BAML indicates that when sentiment has reached this level or lower, total returns over the subsequent 12 months have been positive 100 percent of the time, with median 12-month returns of 30 percent.2. A recent Pew Report indicates that attitudes towards the economy in the US and Europe are at extremely negative levels. Only 31 pecent of Americans view the economy as ‘good’ while only 16 percent of Europeans say the economy is on the right track. The Chinese and Germans were exuberant in comparison. Eighty-three percent of Chinese respondents believed they are on good footing while 73 percent of Germans perceived their nation was in good standing. Confidence in capitalism seems to be faltering as well, as only 67 percent of Americans believe they are better off in a free-market economy versus 76 percent in 2009.3. Multiple compression has held back the market essentially since the dot com bubble. Along with inflation and perceived levels of growth, confidence has an effect on how much investors are willing to pay for earnings and hence the value of equities. With a renewed level of confidence we may see some multiple expansion.Sentiment and confidence levels act as great contrarian indicators. If everyone is fearful and negative it suggests they are sitting on the sidelines already (sold already) and there is less likelihood of intense negative selling. If the mood and sentiment shift, “animal spirits” reassert themselves and asset prices get bid up. Although there is a lot to worry about these days, a lot of people are already worried. There are no guarantees that things won’t get worse but many market participants appear to already be expecting the worst. From a sentiment perspective, at least, things look very bullish.Nathan Kowalski is the chief financial officer of Anchor Investment Management Ltd.