The following chart was taken from The Kirk Report. So where are we at the present moment? Despite the fact that we are at the year's high, the feeling does not transpire to the broader market. Safe to say, its an institutional driven rally, mainly into large caps.
If you look at the cycle below, its actually a continuous loop, i.e. the "optimism" coming out of recovery on the extreme right should connect back to the "optimism" on the extreme left.
In terms of sentiment, we are nowhere near the "excitement" and "thrill" side. We are probably on the "hope" and "relief" points currently. Does that mean that the risk element is low then?
Short answer "yes", the risk is not high despite what many bears might want to think.
Even if there is a pullback, I doubt we will go through a massive one. As in any recovery, the lack of participation by private investors is reflective of other market recoveries. Private investors will again tend to gravitate when market sentiment moves to "optimism-excitement" points.