"Distrust and caution are the parents of security." - Benjamin FranklinNEW YORK ( TheStreet) -- The highly anticipated Twitter ( TWTR - Get Report) initial public offering is finally here and is not disappointing thus far. Shares closed at$44.90, up a whopping 73%, compared with its IPO price of $26. With the Twitter IPO and new all-time highs in the broad indices, euphoria over U.S. equities continues to hit multi-year extremes. The spread between bulls (55.2%) and bears (15.6%) in the Investors Intelligence Poll moved up to 39.6% this week, the second-highest level since the low in March 2009. The last time the spread was this high was back in April of 2011, which coincided with a top in the S&P 500 and subsequent decline of over 20%. Before that, you have to go back to the October 2007 peak to find sentiment at a similar extreme.
- The Global X Social Media ETF ( SOCL - Get Report), Tesla ( TSLA - Get Report), Netflix ( NFLX - Get Report) and other "story" stocks continue to trade weak. When these momentum stocks are underperforming, it is typically a sign of risk-off behavior. The Russell 2000, as seen in the Russell 2000 ETF ( IWM - Get Report), peaked on a relative basis over a month ago and continues to underperform. This is a negative reflection of overall market breadth, where the average stock has not been able to keep pace with the broad indices. Defensive sectors viewed through the Consumer Staples ETF ( XLP - Get Report) continue to outperform, a sign of risk-off behavior. The PowerShares DB Commodity Index Tracking Fund ( DBC - Get Report) continues to decline, trading at its lowest levels since June; this is further evidence of deflationary behavior. The Guggenheim CurrencyShares Japanese Yen ETF ( FXY - Get Report) has been unable to hit new lows and is trading sharply higher, a sign of risk-off behavior. European financials continue to trade weak, calling into question the European recovery thesis. Investor sentiment from multiple indicators is at overbullish extremes. From such extreme levels in the past, we have typically seen below average performance in the S&P 500 going forward.