Kenneth Fisher, who correctly said 2011 would be a flattish year for the market with lots of volatility, sees a much better scenario developing in 2012.

“Optimists are scarce, and ample skepticism is rampant — a bullish feature — providing a wall of worry for this bull market to climb,” Fisher writes along with several colleagues in Fisher Investments’ quarterly outlook. They say that headlines about tapped-out consumers, sovereign debt, a Chinese hard landing, and other worries are unfairly overshadowing a number of positives, such as strong growth in corporate profits and revenues, good valuations, and an improving global economy. “In our view, many of today’s more prominent fears are either wrong or now too old to have much market-moving power going forward,” they write.

Fisher and co. write that Italy will be the “dominant elephant in the room” for the European debt crisis this year, and they think it will persevere and beat expectations of doom. “Note, stocks move ahead of known events — they don’t wait for clarity,” they write. “Waiting for clarity is almost always very costly.” They add that in 2012, the PIIGS debt fears will reach three years old. “Positive or negative, sentiment typically doesn’t stay elevated on an issue for so long,” they say. “Sentiment here likely improves, helping boost stocks.”

They also see emerging markets reaccelerating both in terms of growth and stock returns in 2012, and they expect the U.S. economy to continue its expansion. The biggest threat they see: eurozone politicians trying to fix the continent’s debt crisis with new regulatory or accounting schemes. They say the kick-the-can-down-the-road strategy is actually a good one, and allows the private sector time to come up with solutions.