Since the August 2011 debt ceiling negotiations went badly and Standard & Poor's cut America's AAA credit rating, retail investors have lost their appetite for stocks. In the market chaos that ensued, they moved into cash and bonds. And in the economic turbulence that followed, they've largely stayed there.

In fact, given the market strength of the last few weeks, the resistance to participate has resulted in the largest divergence between rising stock prices and barren mutual fund flows since the 2002 bear market turn.

Until now. 

Fresh data from research company EPFR suggests that a positive surprise on a short-term extension of the fiscal cliff, the likely "QE4" stimulus announcement from the Fed in a few weeks, and the positive seasonality the market enjoys this time of year could all combine to unleash a massive wave of short covering and catch up buying as investors chase a market that's already moved away from them.

According to their fund flow data, in the fourth week of November U.S. equity funds attracted over $10 billion in net new inflows -- the best showing in more than a year.

New-found optimism also increased appetite for other risky asset classes, including emerging market funds (inflows hit a 10-week high) as well as "junk" or high-yield bonds and alternative assets.

Overall, equity funds recorded a near $15 billion inflow during the week ending November 28 -- the second highest total year-to-date.

Here's the kicker: Recent buying has been driven by institutional, professional traders. Average, retail investors pulled money out during the week for the 46th time in the 48 weeks year-to-date.

If recent market strength continues into next spring before the threat of the debt ceiling forces Washington to make hard decisions on taxes and spending, these folks could get caught out.
I'm expanding the long exposure of my Edge Letter Sample portfolio with the addition of Google (GOOG), Credit Suisse (CS), and Santander (SAN) as big tech and European banks show some buying interest.

Disclosure: Anthony has recommended GOOG and SAN to his clients.

I found these positions with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)

Be sure to check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at anthony@edgeletter.c​​om and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.