The low-volatility rally in stocks from the October low has pushed bullish sentiment on the market to high levels, which could be a warning signal for stock exchange traded funds.

Friday’s sell-off on Greek debt concerns erased the S&P 500’s weekly gain, but investors are optimistic the rally can continue further into 2012.

According to the latest Investors Intelligence survey on advisor sentiment, the number of bulls rose to 52.1% from 48.9% a week ago. The reading is above the December highs but still below the April 2011 peak of 57.3%.

The number of bears stands at 28.7%, while the difference between bulls and bears favors the bulls by 23.4%. This is the highest spread in over nine months, according to Investors Intelligence.

“High readings signal increasing risk,” it said. Investors watch sentiment figures because an elevated number of bulls mean there may be fewer buyers left to push stocks higher.

The recent bull/bear sentiment spread remains well below the 28% reading in July 2011 and the 40% difference last April “so a top is not signaled immediately,” Investors Intelligence added. “A spread above 30% would suggest danger for a rising market.”

A separate survey from the American Association of Individual Investors shows bullish sentiment rose to 51.6% for the week ended Feb. 8. The long-term average is 39%.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.