"I just called ... to say ... I love ..."

this raging bull market.

But for investors who are singing the praises of the market's performance today and are buying call options to show their feelings, they may want to be aware that some pros still see danger signals around them.

Or so said Jim Stacks of

Investech

, an advisory firm in White Fish, Mont., pointing to an option indicator known as the call-put ratio (not to be confused with the

Chicago Board Options Exchange's

put-call ratio; Stack's version is derived the other way around).

Stacks generally sticks to macroeconomic and other analysis; he's not an options specialist per se. But his firm's call-put ratio hit such an extreme level in mid-December that he took a closer look and told clients to "view it if the call-put ratio is hitting an extreme. This isn't a tool we rely on heavily; it's a short-term guidance tool. But in December, it was at the second most bearish reading in a decade."

Investech's call-put ratio hit a high of 117 in December, well outside the traditional trend lines in which he usually charts the call-put ratio. (When the number of calls vs. puts explodes, the ratio explodes. Calls are option contracts investors often use as a low-cost wager that a stock will move higher. Calls give the buy the right to buy a stock a certain price and time in the future. Puts serve the opposite purpose; they allow the buyer to sell at a certain time and price in the future).

Increased traffic means something. "Trading psychology was lining up on one side of the fence. It's usually indicative there's going to be a swing. We've seen part of it" this week with the

Nasdaq's

roller coaster ride, he said.

What's really weird? Generally, with a drop in the Nasdaq like the one this week, investors would be running out to buy puts. But barring Thursday and excluding some specific names, they haven't been doing that.

"It's amazing how orderly the decline was," he continued. "There was no tremendous put-buying. The psychology is so apparently phenomenal from an investor standpoint that it will take far more than a few days" of selling to move all the bulls over to the bearish side of the boat.

In Friday's trading, the call-buying hadn't stopped in highfliers such as options of

Yahoo!

(YHOO)

and

Qualcomm

(QCOM) - Get Report

.

But interestingly, investors were moving into long-term call options. More than 2,000 contracts traded in Qualcomm's 2001 January 190 calls Friday, with the stock up 3 11/16 to 143 13/16.

Yahoo! logged a trade of just over 2,000 contracts in the 2001 January 450 calls, which were trading at 91 1/4 ($9,125), up 8 5/8 ($862.50). Yahoo! stock was up 18 3/8 to 386 9/16.

All this pointed up the drawbacks to these types of sentiment indicators: They are contrarian, and they are poor market-timing tools. "They have that fallacy," Stacks said. "Once they give their signal, it's hard to know what they say in terms of time horizon. But afterwards, one had better fall back on other indicators."