The stellar rally in global equity markets appears to be far from over. Still, some market watchers say they are starting to spot something that they haven't seen for a while: sellers moving back in.
Fueled by monetary stimulus from major central banks, stock markets in the U.S., Europe and Asia have enjoyed seven months of strong gains, with the Dow Jones Industrial Average and S&P 500 setting new record highs overnight.
Analysts say that although the trend remains intact for now, signs of selling in recent days suggest some caution is starting to emerge.
"We are starting to see a little bit more of two-sided type trade, we see some sell-side participants and today [Wednesday] was a good example of that, whereas before trade was so heavily weighted towards the buy-side," Ben Lichtenstein, president of Tradersaudio.com, told CNBC Asia's "Squawk Box" in response to a question about whether cracks in the market rally are starting to show.
"Don't get me wrong, institutional activity was heavily weighted to the buy-side, but the sell-side did have a presence and that is kind of rare at the moment," he added. "And we are starting to see a bit more of that lately."
Caution over the recent market momentum set the tone for Asian equity markets on Thursday. Japan's benchmark Nikkei 225 stock index, the best performing major market this year, slipped almost 1 percent, while markets in other parts of the region also pulled back from recent highs.
"We are in unprecedented territory at the moment so it is good to err on the side of the caution and there are some signs of that," said IG Market Strategist Kelly Teoh, referring to U.S. markets at record highs.
The tricky thing for investors, said strategists, was to not bet against a market that was clearly heading in one direction.
"If we're looking at the global theme, the theme is to go long-equities – that is where the yield is right now, so if you're not exposed to that you lose out," said Teoh.
"But stocks have hit all-time highs so there is a need to be concerned. Everyone knows what the situation is and they are cutting back on some of their equity exposure and taking some profits now. That is the prudent way to go," she added.
U.S. and Japanese markets have led the rally in global stocks this year, with the S&P 500 notching up gains of about 16 percent, while Japan's stock market has soared some 45 percent amid concerted efforts to kick start the country's economy.
(Read More: Hold On, Japan Still Missing Key Pillar of Growth)
"The fact that we ignore bad data and continue to buy risky assets is also a source of worry, so we are trending like we did in 2006-07," Sebastian Galy, a senior currency strategist at Societe Generale, told CNBC Asia's Squawk Box.
Tradersaudio.com's Lichtenstein said that the S&P 500, which closed Wednesday at about 1658, would have to drop back to around the 1550 to 1525 to signal a significant turnaround.
"You cannot doubt this market, until it starts taking out some of its value," he said. "Given the conditions that the Fed has created, you have to assume that the rally will continue a lot stronger and for a lot longer than had been anticipated."
(Read More: Talk of Fed Tapering Not Spooking Market Yet)
—By CNBC's Dhara Ranasinghe. Follow her on Twitter @DharaCNBC