It's often regarded as an ominous trend in the market, but it's not discouraging one of Wall Street's biggest bulls.
In a new note, Canaccord Genuity's Tony Dwyer highlights the latest Investors Intelligence Newsletter survey, which finds 62 percent of market newsletter writers are bullish — a historically high number.
Even though a high number is often perceived as a red flag, he isn't scaling back his bullish forecast.
"I wouldn't say it's a sell signal. I think it's just a sign there's too much optimism," Canaccord's chief market strategist said Wednesday on CNBC's "Trading Nation." "Ultimately, it's like something that can be used as an excuse. For a while, that was a sign of the top like a Time [magazine] cover or something like that. But all of these sentiment gauges only matter like in that one-tenth of a percent."
But Dwyer, who expects the S&P 500 to be 9 percent higher than current levels by the end of next year, isn't completely ruling out a drawdown that's tied to surging optimism.
"It's only happened a couple of times during the last seven to eight years. In both of those occurrences, you did have a little bit of a very brief pullback, but it wasn't anything to try to 'play' or protect against. It was just that you had a tiny pullback, and it ran to new highs again," he added.
His latest comments came as the stock market slipped Wednesday. The major indexes saw profit-taking a day after the Dow saw its 54th record-high close of the year.
Despite the retreat, Dwyer argues that the historic rally is intact because fundamentals are holding it together.
"The market correlates most directly to the direction of earnings," Dwyer said. "That direction continues to be higher because the credit markets are still open, the yield curve is positively sloped [and] banks are lending."