In a development that will likely get a bit of attention today (especially since the Wall Street Journal ran a front-page Money section article about it a few weeks ago), individual investors in the AAII sentiment survey just reached a five-year high in optimism.

The last time they were this bullish on the market's prospects over the next six months was July 13, 2005.

That particular time was a good time to be going against these folks' opinion and reducing long exposure as the S&P 500 topped out soon thereafter and went into a three-month funk.

Let's go back to the survey's inception in 1987 and see how the S&P performed each week for the next 30 weeks after the Bull Ratio reached as high a level as it's at now.

Not surprisingly, results were weak.  The average return was negative the entire time, except for one small positive blip 3 weeks out.

The market's worst performance was 10 weeks later, when it was positive only 37% of the time and sported an average return of -2.4%.

There were three other times the Bull Ratio hit a five-year high (12/16/92, 11/8/00 and 6/25/03).  The S&P's performance going forward was inconsistent, but six weeks later its returns were +1.5%, -10.3% and -0.8% as any short-term gains were given back.  But longer-term, the index rose substantially after the '92 and '03 occurrences and fell hard after the '00 one.

It's possible that due to the WSJ article, and also because of the holiday, the current survey results are going to be skewed from what we've seen in the past.  I don't think that's a big danger, although it is something to keep in mind.