Contrarian analysis has done a good job of predicting recent market moves, says MarketWatch’s Mark Hulbert, and right now the contrarian take is flashing a warning signal.

“Stock market timers are now more bullish than they were at the May 1 bull market high, even though the market averages are still slightly below those previous highs,” Hulbert writes. “This is not good from a contrarian point of view.” He says the average recommended stock market exposure level of the shortest-term market timers monitored by his Hulbert Financial Digest is at 50%, higher than the 42% level seen on May 1.

Hulbert says if a pullback does occur, it will be important to watch how swiftly the bulls abandon their position. “If they are as quick to do so this time around as they were three months ago, then contrarian analysis once again will forecast only a modest pullback,” he says. “But if the bullish timers stubbornly hold on to their bullishness in the face of any pullback, then there will be greater odds of a more major correction — since only in that way will the veritable Wall of Worry get rebuilt.”