A widely watched sentiment indicator, one which last peaked in October 2007 just before the stock-market crash, is back in major bull territory. That has some worried.

Investment newsletters followed by the research firm Investors Intelligence reports nearly 59 percent of newsletter authors see stocks going higher, just a few points below the 62 percent it found three years ago, according to CNBC.

Just a few months ago in August, that number was much lower, at 29 percent, said the research firm.

A rush toward stocks at this point would not be terribly surprising. We’ve seen a roughly 20 percent run higher from the lows of the summer. Fund managers could easily decide to buy more as the quarter expires. Everyone wants to look like a winner at the end of the year.

Money is pouring out of bond funds in a rising panic, too. Muni-bond investors are dumping their holdings at the fastest pace in 14 years, reports Bloomberg news.

That means more cash available to buy stocks, even if they seem overvalued.

But rising prices also mean stocks are getting to be less of a bargain, creating the risk of a selloff in January. Barron’s figures stocks are at about 20 times earnings now (looking backward, not at forward earnings).

While predicting a “good” PE ratio is an inexact science, few would call 20 times earnings a strong buy signal.

The bears are getting press, too.

"It does not seem to me that economists have fully taken into account the drag from the fiscal side of things in the U.S. and in the euro region. Global GDP consensus has been at 4.2 percent for several months,” Gluskin-Sheff’s resident bear, David Rosenberg, tells clients.