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The most popular way to measure market fear — the CBOE Volatility Index — fell to its lowest point of the four-year bull market, signaling to many traders a level of complacency that sets in before a powerful drop in stocks.
"The next few weeks or months could be treacherous for shorts, but the odds favor a volatility spike of fairly epic proportions off of what is a very depressed level," said Dan Nathan, co-founder of RiskReversal.com. "I think you would have to have your head checked to load up on equities here."
The bull market's latest run, which sent the Dow Jones Industrial Average soaring past its 2007 record high, may have some cheering but traders say some of the stocks leading it are riskier bets, a sign that a pullback could be ahead.
"It used to be a joke on trading desks that when the mortgage insurers started rallying, the markets were ready to turn lower," said Enis Taner, global marcro editor for RiskReversal.com. "They're the real long-term trash."
One of the longest and most powerful equity bull markets in history turns 4 years old today. And traders believe there is just one man to thank: Federal Reserve Chairman Ben Bernanke.
At 1,461 days and counting, it's the eighth longest bull market since 1928, using data from Bespoke Investment Group. And if the S&P 500 climbs another 3 percent to surpass its 2007 high, the 136 percent total price increase will make it the fifth greatest bull market during that same time frame.
"I think Bernanke has sort of carried the load himself during this period," remarked investing legend Warren Buffett in an interview with CNBC this week. "Cheap money makes things happen."
(Read More: Buffett Still Buying Stocks, Sees 'Good Value')
Retail investors fully embraced this bull market in February, looking past any threat from the sequester crisis in Washington, D.C., and buying stocks more aggressively than they have in three years, according to a sentiment index from TD Ameritrade.
(Read More: CNBC Explains Sequester)
They looked for the stocks that would lead the next leg of this bull market, buying into underperforming names such as Apple, Facebook and Intel, according to the survey that tracks the behavior of the largest pool of retail investors.
What do a $3.80 gasoline price, a 2.15 percent 10-year Treasury yield and a 20 reading on the CBOE Volatility Index have in common? They're all levels that could ring the bell on this rally.
Gas prices have been chugging higher for the past month, with the current national average at $3.78, according to AAA. That's just two cents from the magic $3.80 and a traditionally dangerous level for the stock market, according to Barry Knapp of Barclays and other strategists.
(Read More: Pro: Gas Won't Hit $5 This Year)
In fact, Knapp has a chart in one of his latest strategy reports that shows $3.80 a gallon for gas has historically been where the forward multiple of the S&P 500 index tops out. In other words, investors start paying less for future earnings in anticipation higher gas prices will hit company profits.
"A rise in gasoline was followed by a deceleration in consumption in the following quarter" in February 2011 and 2012, Knapp said in a note to clients.
(Read More: Strike Three! The US Consumer Is Out)
Meanwhile, ten-year Treasury yields have jumped to around 2 percent this year amid concern that the Federal Reserve may end its quantitative easing plan sooner than planned. If this yield hits 2.15 percent — the average dividend yield for stocks in the S&P 500 — bonds suddenly look very attractive again to income seekers who have flooded into stocks.
"The fact that stocks have been yielding more than the 10-year has been a major argument in favor of equities over the past nine months or so," the strategists at Bespoke Investment Group wrote in a note pointing out these metrics colliding toward each other.
Why take the risk of owning a stock for its yield, when you can get the same comfort without that risk in a Treasury security?
(Read More: Pullback? Pfff. These Pros Say 'Buy!')
The last number — the VIX — was thrust into the equation today as the so-called fear gauge jumped more than 20 percent to above the 19 level. The metric measures the price of puts (market protection) to the price of calls on the S&P 500.
A rise above 20 in the VIX in April 2012 and July 2011 signaled a jump in investor fear and presaged pullbacks in the market.
"If we got above 20 and held it for a couple days, then market would go a lot lower," predicted Jon Najarian of TradeMonster.com.
And the winner for craziest stock of the year is ... Blackberry. The formerly-named Research-In-Motion trades, on average, 5 percent in either direction on any given day this year as traders, investors and Wall Street analysts guess whether their new phone will be a success or not.
(Read More: Samsung's New Phone Will Debut on Apple's Turf)
It's the question on everyone's mind right now.
Is Carl Icahn's massive bullish position in Herbalife disclosed Thursday just a personal vendetta against Bill Ackman, who is enormously short the vitamin marketing company, or is it a legitimate bullish bet by the billionaire investor?
Icahn's vitriol lobbed at Ackman in a direct fight on CNBC last month would suggest it is just personal, as the veteran activist shouted at the Pershing Square founder that he was a "crybaby" (in reference to a decade-old legal dispute).
However, digging deeper into yesterday's filing, one finds that Icahn's position is largely made up of options, a leveraged bet that suggests that the Wall Street titan may really mean business.
December had the fewest layoffs since the government began tracking the data in 2000. Also, the most people quit their jobs during the month since June 2008, another sign that job growth and consumer confidence may start to pick up steam this year.
"These points go against the popular notion that the economy ground to a halt while DC negotiated the Fiscal Cliff late last year, and supports the hope domestic labor markets can continue to improve in 2013," wrote Beth Reed of ConvergEx Group, whose strategy team wrote about the Bureau of Labor Statistics data in a report to clients Wednesday.
"If lawmakers can reach consensus in Washington and allow businesses a sense of economic stability, then job growth might actually accelerate," she added.
Signals out of the ultra-secretive executive suite at Apple increasingly point to an announcement soon of a dividend increase, buyback or another form of capital distribution to shareholders. The latest came from an analyst report Sunday.
"While trying to extract information from AAPL (Apple) management is like squeezing 'water from a rock,' we did speak with AAPL CFO (Peter Oppenheimer) this past Friday and found the conversation helpful," wrote ISI analyst Brian Marshall in a note to clients Sunday. "We touched upon a variety of topics, including capital allocation framework."
(Read More: Apple and Samsung: Frenemies for Life)
After speaking with Oppenheimer, ISI's Marshall recommended back to the company in Sunday's report that it increases its current 3-year allocation plan amount to $60 billion from $45 billion. His plan, which would use 50 percent of the firm's annual free cash flow, puts two-thirds of the cash toward a dividend and the rest to buy back shares.
Marshall's conversation followed a rare press release Thursday from Apple, which came in response to a call from activist investor David Einhorn for the world's largest technology company to issue preferred stock.