Investors started to become more optimistic during the past few weeks as the market rallied. Newsletter opinions on the markets prospects reached levels that normally coincide with market bottoms. This was seen in the weekly Investors Intelligence Survey, and the more volatile American Association of Individual Investors survey (AAII).
Corporate insiders are still actively buying stocks in their own companies which is bullish for stocks. Short selling is also somewhat high which means investors are trying to profit from a decline in the market. Finally, some of the CBOE Put/Call indicies are showing more complacency among investors.
The Rydex Fund flows shows that investors have recently added quite a bit of cash into the Rydex bullish funds (these funds make money when the market moves higher and some of them are leveraged). This could be at least a short term negative for stocks.