With the Standard & Poor’s 500 Index rallying over 15 percent from the June low to the recent high, investor optimism should grow. There is no denying that development.

My concern is that investor optimism has jumped to seven-month highs.

The Investors Intelligence Report from last week showed the bullish percentage came in at 54.2 percent, the highest reading since Feb. 10.

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

The bearish percentage came in at 24.5 percent, giving us a ratio of 2.2 bulls for each bear.

Normally I don't worry until the ratio hits 2.5:1, but given the high bullish percentage, I am a little more concerned about the overall market than I normally would be.

Another factor in my cautious position is the Chicago Board Options Exchange Volatility Index (VIX). The VIX has closed each of the last eight days below the 15 level.

The last time the VIX closed eight straight days below the 15 level was a stretch in May and June of 2007.

If you don't remember what happened in the summer of 2007, the S&P hit resistance at its all-time high in June, dipped for a few months and then hit its all-time high in September of that year.

It was in September 2007 that the credit markets started locking up and the bear market started — a bear market that saw the S&P lose half of its value over the next 16 months.

Do I think we are looking at the same kind of scenario now? No, but I do think we are due for a pullback. All the market needs to start selling off is a catalyst.

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