Just because the overcrowded bearish bandwagon broke down doesn’t mean there aren’t better buying opportunities ahead, writes MoneyShow.com senior editor Igor Greenwald.

The euphoria of October 2007 is separated from the despond of March 2009 by 910 points on the S&P 500. At Monday’s lows, the stock market was just 1% from the midpoint of this range.

Since then, it has rallied 6%, to most people’s shock. Those with a good grasp of what will happen next week should buzz UBS (UBS), as they’re currently one overconfident trader short.

We’re confronting a binary future where either the status quo will hold or fall apart. It’s just possible, still, to lay out a scenario where Europe buys a little bit more time to fix its banks, US consumers sulk but keep on shopping, and the developing world continues to drive global growth as its workers continue to claim their fair share of the planet’s resources.

If that’s the case, then corporate earnings will hold up, proving stocks inexpensive at 13 times the current year’s operating earnings...particularly so in an environment of negligible interest rates.

Alternately, Europe could unravel, sparking another round of US layoffs as consumers go on strike. In that scenario, next year’s corporate earnings might trail this year’s record crop by, say, 20%, which would justifiably force the market sharply lower.

It’s a close call, so close that it’s very tempting to let the market action of the moment serve as a tiebreaker.

The shell-shocked bears are incredulous that the trading algorithms stopped giving the deteriorating economic outlook its due this week. But in truth the market sniffed out the looming slowdown in late July, and spent a record amount of energy trying to price that in over the ensuing six weeks.

It’s an old problem: the prevailing orthodoxy (that things are bad, and getting worse) has attracted too many last-minute converts to continue prevailing in the short run.

Newsletter writers tracked by the Investors Intelligence survey have turned bearish with a vengeance, showing a degree of skepticism that last prevailed in March 2009.

The AAII investor sentiment survey has held up better, but still shows more bears and bulls. And by one reckoning, August saw the heaviest mutual-fund outflows since December 2008.

These are not typically the hallmarks of a market near a top.

In fact, one of the most consistently bearish market seers in recent memory, Canadian economist David Rosenberg of Gluskin Sheff, is citing the extremely bearish sentiment as evidence that stocks can keep squeezing higher for a while yet, in the context of a cyclical bear market.

Fortunately, there’s no need to buy, or sell, “the market.”

Stocks like Exxon (XOM), McDonald’s (MCD), and Annaly Capital (NLY) are attractive value propositions whether the European Monetary Union survives or not, and in all likelihood even if there’s another US recession.

Apple (AAPL) and Expedia (EXPE) have exciting growth opportunities regardless.

If we get another recession, it’ll probably be milder and shorter than the last one. It might even set the stage for a real pickup in demand late next year.

There are likely to be plenty of buying opportunities between now and then. And, much as I may like certain stocks, for the market as a whole I’d hold out for a better one than we have currently.