Optimism is in low supply. That''s a good thing US equity earnings season starts on Thursday with financials. Many people are looking to economic data, technical levels or markets like bonds to determine if we''re at an inflection point. For me, the tell is always in sentiment. Markets always bottom well before the economic data as investors flee and pessimism reigns. The word ''recession'' is on the tip of everyone''s tongue and sentiment around Europe is brutal. If Russia cuts off European gas we could see a real rout but otherwise, there are signs that the worst is already priced in. For earnings season, no one believes the analyst numbers. Here''s a survey of institutional investors from Scotiabank. This earnings season will be a clear case of the difference between ''analyst expectations'' and ''what''s priced in'', with the latter being much more bearish. I think we got a preview at the start of the month when Micron took down its Q4 revenue guide to $7.2 billion, far short of the $9.15 billion consenus. What happened? Shares initially fell in the pre-market but the buyers quickly waded in and it closed above the openingi levels, then rallied the next day and has continued to climb.