What a Week: Balky Bulls

In the midst of this historic rally, one question keeps coming up: Where are the wild-eyed bulls?

"We're hearing many people saying 'the market is overextended, it's too good to be true,'" Steve Porpora, managing director of floor operations for William O'Neil & Co., says in an interview on TheStreet.com Friday. "It's all good stuff. You always want some negative sentiment in the marketplace to keep some money back."

From a contrarian perspective, the fact that more investors are getting more skeptical as the market rallies is a bullish sign and is very different than 1999, for example.

Back then, retail investors were plowing money into U.S. equity funds at record levels. But after some modest inflows the prior two weeks, domestic funds reporting net outflows of $5.41 billion for the week ended May 2, according to AMG Data. The most recent week was more in keeping with recent fund flow trends.

"Both domestic and international fund flows displayed a significant decline in March, as U.S. fund flows were $1.61 billion, compared to international fund flows of $6.59 billion," reports Citigroup chief U.S. equity strategist Tobias Levkovich. "Moreover, in [the first quarter], total stock fund flows were down about 30% from [first quarter 2006], with U.S. and international flows both recording a similar year-over-year drop."

On a related note, the American Association of Individual Investors' latest weekly survey shows only 28.5% of respondents are bullish while 54.3% are bearish, the latter at the same level as last July's lows.