Last time sentiment was this bullish amongst stock investors was – oops! – early 2000...

OPENING DISCLAIMER, says Gary Tanashian in his Notes from the Rabbit Hole.

I am not trotting out the past to show what a great contrarian I am. Truth is, I have not come close to fully taking advantage of the bull calls last spring and summer. Given what has gone on in the precious metals, it has been all I could do to manage risk to a break even.

That out of the way, last May we posted this article when it was very hard to be a bull:

"The dumb money sold in May and went away.Led by near suicidal sentiment among the gold 'community', the broad markets recently embarked on a southerly course as well, culminating with 'dumb money' sentiment at very bearish levels in technology, energy, financials, industrials and on out to commodities. The last time sentiment was in such a compelling (contrarian) bullish structure was after the damage inflicted upon markets by last summer's acute phase of the Euro crisis."

Flipping the above on its head today, we would say that led by near pervasive and still-growing bullish sentiment, the broad market is continuing upward on its course and is culminating with 'dumb money' sentiment and momentum being set to over bullish levels. The last time there was such consensus on the economy and the stock market may well have been in 2000.

"Think about the election year pattern, think about how wildly bearish sentiment has become, think about the market's need to shake out the dumb money prior to rising and most of all think about how policy makers need to be perceived as doers of good; as part of a solution, as opposed to chronic purveyors of an inflationary regime that has been in force most intensely since 2000."

Policy makers are not only thought of as part of the solution, they are revered far and wide in a reverential and growing rabid manner. This is the ultimate bull rationalization and it is the underpinning of confidence (great word) in today's market.

In July we went on to write this:

"There are still articles showing up in the mainstream media [MSM] talking about what a good idea it was to 'sell in May and go away'. But the truth of the S&P 500 chart begs to differ. Yes, it has been a nerve wracking couple of months, but as of Friday the SPX is above where all but the most astute of the 'sell in May' contingent got out."

There are now articles showing up in the MSM talking about the Great Rotation, the Dow's all-time highs and a new era for the US economy, which has weathered the Euro crisis and myriad domestic issues as it continues to strengthen. All the talk of inflationary policy makers has gone the way of Goldilocks.

"I do not love this market by any means. But I am still long (and profitable) several positions that were bought down near the lows (Lithium, Rare Earths, a tactical global fund, a global bond fund) and others in technology and energy added since."

Well do you remember how hard it was to be bullish last summer? Now it is easy to be bullish. Too damned easy.

"Last week as SPX tested but did not fail support at the EMA 200, I held, white knuckles and all. This market may yet prove that the dumb money sold in May; especially if the rally ends up going on long enough to drag them back in again before any coming change to bearish again."

The dumb money is holding without a care in the world.