Arbeter says another indicator showing high levels of fear, which came out before the market got whacked on Thursday and Friday (Oct. 18 and 19, respectively), came from the American Association of Individual Investor survey: Bullish sentiment dropped to 28.7% while bearishness jumped 44.6%.

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On the one hand, high past returns are an indicator of low future returns: that has certainly proved true for those who bought equity mutual funds at the turn of the decade.

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That may not be particularly rough for a stock up more than 44% over the last 12 months, but it is an indicator of the high expectations the market has for housing-related stocks after a big 2012, and the potential pain when those expectations are not met.

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