Meisler: Too Much Bullishness

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Was breadth bullish because the financials were all positive? I ask because there wasn't much else that was bullish about Monday. Well, perhaps I ought to phrase that differently.

The fact that there seems to be buyers down below whenever we fall is bullish. And breadth has kept pace with the rally, so that too is bullish. But that has turned sentiment too bullish for my taste.

The International Securities Exchange's equity call/put ratio was 203% Monday. That is pretty high. For the bulls the last time we had such a high call/put ratio was the day before the lows in early March. However, the two previous times were Dec. 30, 2008, which gave us a few more trading days on the upside before we sunk in earnest, and May 16, 2008, which was the spring high in the S&P 500 last year.

The Chicago Board Options Exchange's equity put/call ratio confirmed this bullishness by chiming in at 50%. The previous reading in this area was 51% on Sept. 19, 2008. For those who need a refresher that was the second day in September when the government announced the Troubled Asset Relief Program and the ban on short-selling of the financials. You probably don't need me to remind you that this wasn't a great time to buy.

Prior to that we had a reading of 39% on Dec. 20, 2007, which also wasn't a great time to buy. And prior to that we had a reading of 45% on Oct. 31, 2007, which turned out to be the high in Nasdaq.