NEW YORK (TheStreet) -- Two back-to-back articles on the excellent FTAlphaville caught my eye last Friday.

  • Net inflows into equity funds ( read the article on FTAlphaville), with various targets globally, hit $22.2 billion in the week of Jan. 9, the highest since Sept. 2007 and the second highest since comparable data began in 1996.

    "Yes, extreme moves like this are a contrarian indicator," it warned sternly, with a heavy British accent to match the gravity.
  • Citi's US Economic Surprise Index ( read the article on FTAlphaville) is threatening to turn negative after a decent run in positive territory.

    The graph below shows surprising periodicity and momentum in overshooting zero, perhaps due to the deeply ingrained bias toward linear extrapolation in the human cognitive system.

    A quick surf around the Internet uncovers more of such macroscopic indicators suggesting a potential top. For example,
  • VIX, at 13.36, closed last Friday at the lowest since June, 2007, the perennial end of Good Old Days. This, really, two months before the debt ceiling, spending cuts and U.S. credit rating come to a crescendo? Over-complacency always makes me nervous.
  • As the first big bank to report earnings, Wells Fargo ( WFC) reported record profit for the fourth quarter. But, as with banks especially, one has to dig beyond the headline numbers. I find three things that are worrisome: lower loan margin, slower mortgage activities and record deposit-to-loan ratio.

    These are perhaps the clearest evidence that QE is having diminishing returns, as QE squeezes bank's profit margin (by driving down bond yields and loan rates) and the massive injected liquidity is stuck in banks rather than going to the real economy.

    Even mortgage lending went down from Q3, which was probably the biggest surprise in the whole report. This casts a fresh shadow, once again, on the hope of housing recovery.
  • As economics blog Confounded Interest pointed out, Q1 GDP forecast has been continuously revised down to 1.5% (see chart below). End of QE just got pushed a little further down the road.

    The WFC earnings report, along with the Reuters report that Apple ( AAPL) has almost halved its order with suppliers due to weak demand, will probably mean an ugly Monday. Look for across-the-board weakness in financials, via SPDR Financial Sector ETF ( XLF) for example, or the general market, via SPDR Dow Jones Industrial Average ETF ( DIA), SPDR S&P 500 Index ETF ( SPY), PowerShares QQQ Trust, Series 1 ETF ( QQQ), or the inverse equivalents ProShares Short Dow 30 ETF ( DOG), ProShares Short S&P 500 ETF ( SH) and ProShares Short QQQ ETF ( PSQ).

    Caution: Inverse ETFs may result in significant mismatch over longer time horizon. Detailed study and close monitoring are recommended.

    While the week will be dominated by earnings and a sleuth of scheduled Fed speeches, one longer-term fundamental may very well make the cautious picture painted above materialize: debt ceiling. Last week I wrote that the risk on debt ceiling is very high. Since then I've come to realize, much to my astonishment, that most people talk about the debt ceiling risk in the sense of it being broken!

    No, as I argued last week, there's no chance of that. The risk, rather, is that debt ceiling is raised without any meaningful spending cuts, thus getting a ratings downgrade, or at least the very clear threat of it. Unlike the last downgrade, when global worries counteracted the action and made a joke of the raters, this time it's very likely to stand out like a sore thumb that it is.

    But that is two months away. As we get much closer to it we will see how the market decides to pay attention to it. Mark your calendar, though.

    At the time of publication, the author held no positions in any of the stocks mentioned.

    This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.