Raymond James' Chief Investment Strategist Jeff Saut is cautious.

Raymond James' Chief Investment Strategist Jeff Saut is out with his weekly report. While he still advocates caution, he notes that such extreme pessimism can often be seen as a contrarian signal. As such, it would not surprise him to see a rally as stocks have been compressed on a short-term basis.

Of the negative signs, Saut cites:

• Dow Theory sell signal
• His proprietary trading indicator flashing 'sell' (for the first time since December 2007)
• Negative readings on the monthly stochastic indicator
• Downside violation of the 12-month moving average in stocks (most stocks have broken 'triple-bottoms')
• A death cross (where the 50 day moving average crosses below the 200 day moving average)

You can't really argue with the fact that all of those indicators are indeed quite ominous.