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Investors bolstered by a wonderful January in the market have become so optimistic that it has some options market pros worried and anticipating more pain to come for stocks.

It is understandable that investors would be optimistic about the market despite an economy that has slowed dramatically. Many stocks rallied in January, and the

Federal Reserve has lowered the target on the

fed funds rate by a full percentage point last month.

But all the optimism in the market means something entirely different to traders who take a more

contrarian view of what the general investing public feels.

"I think the market is in for a good shakeout right now," said Jay Shartsis, options strategist at

R.F. Lafferty

in New York. One reason for his pessimism is that there's so much optimism in the market, he said.

One indicator of the excessive optimism can be found in the percentage of bulls in the latest

Investors Intelligence

survey of financial advisers. Its latest reading showed bulls numbering 61%, the strategist said. Shartsis said that number "knocked me off my chair."

"I didn't recover for 10 minutes," he quipped. "It's just plain too high."

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Meanwhile, as the market knocks around a narrow trading range, said one options trader, it could be setting up for a move of "some significance," in either direction.

Some of the options market's indicators of fear and anxiety bear that expectation out.


Chicago Board Options Exchange Volatility Index

, or VIX, recently has been at levels not seen since October, when it fell below 25. During the past week, the VIX had been bouncing from above and below 25, but it closed Thursday at 23.99.

It's no different in


-land, where the brand-spanking new

American Stock Exchange

volatility index (QQV) and the

CBOE Nasdaq Market Volatility Index

(VXN) are around levels not seen since November. Both are up slightly today, showing no signs of significant anxiety or fear.

Low levels in those indicators can sometimes signal huge moves, usually down, in the market. Those low readings late last year preceded significant downturns in the market. And that's what has got some traders concerned right now.