Each week Bloomberg asks Wall Street strategists (the same ones polled for their year-end S&P 500 price targets) for their recommended portfolio allocations to stocks, bonds, and cash. Currently, the consensus recommended stock allocation is 60.5%. As shown in the chart below, this number has spiked significantly in recent weeks. Throughout the financial crisis, strategists lowered their recommended stock allocations pretty much every week. They missed the bottom, however, as the market turned before their consensus hit bottom. During the week of the Lehman collapse, strategists were recommending that investors have 56.6% of their portfolio in stocks. Add this as another indicator that is currently back to its pre-Lehman levels, while the S&P 500 is still has about 9% to go.
The current reading of 60.6% is up quite a bit from its level at the market lows. This doesn't yet suggest that strategists are too bullish, however, as their average recommendation during the '03-'07 bull market was about 64%.