I know I discuss the Investors Intelligence report quite a bit in this space, but I find it to be one of the most reliable sentiment indicators there is.

I find the ratio of bulls to bears to be a great contrarian indicator. When the bullish percentage reaches the point that it is three times that of the bearish percentage, investors should take heed and look to protect their portfolios.

When the ratio reaches 0.8, investors should load up on stocks.

While the ratio hasn’t reached either of these demarcation points at this time, I did find it interesting that the bearish percentage has slipped to its lowest level since last July at 21.5 percent.

That bearish percentage has lasted for two straight weeks and the bullish percentage has come in at 52.7 for the week of April 4 and 48.4 last week.

This gives us ratios of 2.45 and 2.25.

While neither of these ratios screams sell or buy, when the bearish percentage reaches an extreme, it is worth taking note.

The selling we have seen over the last week seems to agree with the bearish percentage reaching nine-month lows being a cautionary sign. The question is will the ratio reach the 3.0 level or not?