Stocks have started strong in 2010 (SPY; blue line, bottom chart), but note that equity put/call ratios have fallen toward levels that indicate an above-average level of bullish sentiment. Levels below .50 have recently been associated with short-term market peaks; this is another indicator I'll be tracking in the coming week.
Meanwhile, this helpful longer-term chart of Investors Intelligence sentiment (top chart) from Decision Point illustrates that we are seeing multi-year low levels of bearishness among traders and investors. Interestingly, it's more the absence of bears than the presence of bulls that is distinguishing the current market--a surprising degree of complacency given economic conditions.
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