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December is shaping up to be a tale of two markets.

On the one hand, the Dow ( ^DJI ) just suffered its worst day in a month, capping a nine-day losing streak — its longest since 1978 . Meanwhile, the Nasdaq Composite ( ^IXIC ) notched six record highs this month, including one on Monday.

Investors can thank the $1.2 trillion worth of value that was added this month to the "Magnificent Seven" stocks — Apple ( AAPL ), Alphabet ( GOOGL , GOOG ), Microsoft ( MSFT ), Amazon ( AMZN ), Meta ( META ), Tesla ( TSLA ), and Nvidia ( NVDA ).

Since the election, their market capitalization has surged by $1.8 trillion, led by Tesla's stunning $680 billion gain. Even more remarkable: This rally comes despite Nvidia shedding $200 billion over the same period.

But investor concerns about the narrowing rally are nothing new . Since this bull market began two years ago, the S&P 500 has tacked on $22 trillion in market capitalization, of which the Mag Seven stocks have contributed a cool $10 trillion, or 45%.

Each time the Mag Seven shows its dominance in the market, headlines trumpet comparisons to the late 1990s dot-com bubble, implying doom. But each time in this rally, other areas of the market have picked up and asserted themselves — while the tech stocks themselves have continued to do well.

Even when the Mag Seven index itself fell into a bear market in July, the damage to the S&P 500 was limited to a 9% drop. At the time, utilities, real estate, and consumer staples cushioned the fall — a classic case of "defensive" sectors earning their moniker.

As the godfather of technical analysis, Ralph Acampora , is fond of saying, "Rotation is the lifeblood of bull markets."

But when massive amounts of cash on the sidelines are being tapped, that can indicate Keynes's animal spirits at work. And BofA just reported the biggest drop in cash allocation since April 2001, a sign of "super-bullish sentiment."

Amid the uber-risk-on sentiment, cash is disappearing from portfolios at a record pace. The latest reading shows the allocation to cash by fund managers dropping to net 14% underweight — the lowest level since at least 2011 and the sharpest decline in five years.

And that level of sentiment is the proverbial fly in the ointment. BofA ominously highlights prior periods when cash allocation dropped to a similar degree: the first quarter of 2002, in the midst of a nasty bear market that would wipe 50% off the S&P 500, and February 2011, just prior to a near-20% drop in the index.