We've probably topped again. Next move is down. Massively down.

Markets have rallied very quickly about 10% (almost 12% if you think intraday) and the little doubt (I dare not say fear — because there was no fear) that had emerged in the correction from late April to June is now long forgotten.

For the past two weeks, ugly economic data and earnings have been ignored, investors greed having taken over the markets.

There are many reasons to believe that the next move is down, and that it's going to be a massive one, until fear really arises in the markets. Here are a few reasons:

1 - Stock Short Sales at 2-Year Low
(Bloomberg) Investors are exiting bearish bets on global equities, pushing bullish wagers on stocks to a two- year high versus short sales, according to Data Explorers.

The firm’s long-short ratio has risen to 9.5, having surged from 5.75 in September 2008 when Lehman Brothers Holdings Inc.’s collapse intensified the financial crisis, the London- and New York-based securities-research company said. The reading is the highest of the data that goes as far back as July 2008.

2 - Perma-bull Carl Futia thinks a new major upleg is on they way on the S&P

3 - Bullish indices confirm that there has never been any real fear to balance the excess bullishness of the past 18 months: they have bottomed in the 40 regions. Look for yourself, compare to October 2008 and March 2009:

what seems to be low today is close to the 2007 and 2008 highs!

4 - Put/Call ratios are very close to their lowest levels of 2010, despite all the problems, the Flash Crash, etc. Also notice that the P/C Ratio never really moved in the fear area. It only reverted to mean, never went higher.

5 - the VIX is also quite low, although admittedly, it could fall far lower than 25

6 - NYTimes report that Economists Say Intervention Helped Avert a 2nd Depression and that they can prove it mathematically (mathemagically?!).

The day Mark Zandi will be right, and that Harvard and Princeton professor will have the slightest understanding of how the real world works, they would be begging for deflation and gold standard and they would try to get Obama dethroned and the Fed dismantled. That day doesn't seem to have come yet, and they are wrong with a certainty of 100%.

ASHINGTON — Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government’s sweeping interventions to prop up the economy since 2008 helped avert a second Depression.

Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved.

In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year.

In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation.

The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody’s Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years.

What transpires from all this, is that the next leg down is going to be an ugly one.