The following shows the updated end of year S&P 500 stock market projections from the largest bank's strategy desks.
As you can see, they have not only kept their extremely bullish projections, but they have upgraded their estimates almost across the board.
Everyone is now "all in" stocks and they see absolutely no sign of trouble ahead.
The same can be seen by looking at the "short" interest on the New York Stock Exchange (NYSE). It has fallen to extremely low levels after the most recent Fed induced rally following the Jackson Hole speech in August where they announced QE2 was coming.
The lack of short interest is very important because in a normal stock market sell off, the shorts will "cover" their position which means they have to buy the stocks back to lock in profits.
This will normally slow down markets as they fall providing a speed bump on the way down. If the short position is low (it is), investors are leveraged into the market (they are), mutual fund cash positions are low (they are at record lows) and stocks were to fall, it could get very ugly fast.