Rick Ferri contributing to Forbes writes an article with the title: Mr. Market doesn't care what you think (link). There is a slight negative correlation, but not enough to be actionable. The exception is at extremes, however in the vast middle it is not enough to be a useful indicator.
Let me make some general comments about sentiment. I find it to be a useful indicator. I remember back at the height of the dot-com bubble and the day trading craze, one of the ladies at church, proudly announced that she had opened a brokerage account and was in the game. Looking back it is easy to see that as a huge blinking red light.
More recently, when silver was making its run to $49, three different novices at three different places talked about silver and their expectations of easy money to be made on the bullish side.
It doesn't always work. As I often write nothing is 100%, and it tends to be the lucky and the liars that get out near the exact top. However, I find sentiment to be useful and powerful. When news comes out on a company, I like to look at the Yahoo finance message board for that company (link to LGF message board substitute the company's ticker for LGF) to see what others are thinking. I look to run contrary. If a stock forum is dominated by negative nellies, that is often a prelude to higher prices. The opposite is also true, if everyone is positive, it might be time to go the other way.
Headline articles or talking heads on financial TV can be good contrary indicators. In particular if a talking head says something like I am 100% sure, that is a strong signal to go the other way. No one with an audited track record is 100%.