After the market exploded in September, and then hit new highs again this past week, everyone has become convinced the Fed will forever propel stock prices higher. According to thestreet.com survey, there is a remarkable explosion of Bullish sentiment: http://apps.thestreet.com/survey/results/rmCustomPollResults.jsp?sid=42898
I’ve never seen a sentiment level this extreme since the bearish extremes we saw in February/March 2009. Likewise, the AAII.com sentiment survey index has consistently shown extremely bullish readings the past few weeks: http://www.aaii.com/sentimentsurvey/
Generally, the contrarian approach would be to take the opposite trade and short the market, but you never know when QE3 will be announced….