Financial markets continue to shrug off geopolitical concerns and waning confidence in the White House to make record highs as investor sentiment shows no sign of slowing. The relentless rally has seen safe-haven assets and Wall Street fear gauge indicators tumble lower and many investors upgrading their targets for U.S. equities. (See also: Why the S&P 500 Is Healthier Than It Looks.)

However, even as sentiment soars one bank is warning that the market could be reaching a tipping point. Bank of America Corp's Sell Side Indicator, which measures the bullishness of U.S. stocks, hit a 20-month high, trading at 53.5, a level not seen since the oil crisis crash of early 2015. The swift turnaround in sentiment is reaching levels that have Bank of America warning investors.

"The recent inflection from skepticism to optimism could be the first step toward the market euphoria that we typically see at the end of bull markets and that has been glaringly absent so far in the cycle," Bank of America said. 

The bank's Sell Side Indicator is calculated using the average equity allocation recommended by Wall Street strategists at the end of each month. "We have found that Wall Street’s consensus equity allocation has been a reliable contrary indicator," Bank of America said. "In other words, it has historically been a bullish signal when Wall Street was extremely bearish, and vice versa."

A contrarian strategy is one that goes against general market consensus and as the consensus grows in one particular direction the risk of a turn around increases. This was evident in 2007 when the VIX last traded below 10. Investors became complacent, which made the ensuing sell-off during the financial crisis deeper than many had imagined. 

As the current rally continues, there is no shortage of happenings to sway markets. The pending French election, geopolitical tension in North Korea, and standoffs in the White House all pose threats to investor sentiment. And not to mention we have just ticked over into May, often a pivotal month for investors. (See also: The Truth About "Sell in May and Go Away".)