In the last four weeks, we have seen the bullish percentage on the Investors Intelligence report drop significantly, but the bearish percentage has barely moved.

After peaking at 54.2 percent on Sept. 19, the bullish percentage has fallen for four straight weeks and now sits at 42.6 percent.

The bullish percentage falling is good from a contrarian perspective, but unfortunately the bearish percentage hasn’t been rising in equal increments.

Editor's Note: 5 Signs Stock Market Will Collapse in 2013

The bearish percentage was at 24.5 percent on Sept.19 and has only risen to 26.6 percent as of last week’s report.

While I pay attention to the absolute levels on each side of the equation, I prefer to look at the two percentages in terms of a ratio.

While the ratio of bulls to bears has fallen as a result of the drop in bulls, the ratio has not fallen nearly as much as I would like.

The current ratio is still at 1.6, but history tells us that when we really see violent reversal rallies is when the ratio gets down close to 1 to 1.

The last time we saw the bullish percentage falling sharply with the bearish percentage moving sideways was in the spring of 2011.

We saw a mild rally early that summer, followed by the sharp decline in late summer and early fall.

Editor's Note: 5 Signs Stock Market Will Collapse in 2013