NEW YORK (CNN/Money) - Who would have thought that Amazon -- once the poster boy of pro forma accounting -- would have been the first tech company to follow the advice of Warren Buffett and the example of Coke and start expensing options?

But Jeff Bezos has been full of surprises lately: two quarters ago the company delivered its first actual profit -- not even a pro forma one -- and though on Tuesday night the company reported a penny a share pro forma loss it was the third straight quarter the company significantly beat Wall Street expectations.

That wasn't enough to buy the company some love from investors, who sent the stock skidding some ten percent in early trading Wednesday before putative bargain hunters stepped in to stem the losses later in the day. Investors seemed to have been spooked by worries that options expensing might cut into Amazon's projected profits in the future -- though Amazon says it plans to exclude them from the pro forma numbers it's convinced analysts to look at. (It's not clear just how big an effect on Amazon's reported earnings they'll have, but analysts are already pledging to look the other way.)

Investors are evidently also a little spooked by the stock's already rich valuation. With the stock actually *up* more than 20 percent for the year even after its skid -- and trading for more than double its October 2001 low -- Amazon has some pretty high hopes already baked into its stock.

It remains to be seen if Amazon can in fact squeeze out a couple pennies of pro forma profit this year. But even if you value the stock based on next year's projected earnings -- pro forma earnings, that is -- it still looks expensive.

Before the earnings announcement, analysts were expecting the company to report some 13 cents of pro forma earnings in 2003; that gives the stock a forward P/E of 100. That's likely to come down as analysts raise their estimates in the wake of the company's cheery report -- several analysts already have -- but even if estimates as much as double it will be hard to argue that Amazon is particularly cheap. Amazon's numbers are heading in the right direction; we'll just have to see if its stock price will continue to as well.

Amazon may be the first tech stock to expense options, but it isn't the only tech stock that's up in this down year. AOL Time Warner (AOL: down $1.16 to $10.39, Research, Estimates) (the parent company of this Web site) has plunged, but cut-rate Internet service provider United Online (UNTD: up $0.27 to $9.30, Research, Estimates) is actually up -- yow! -- more than 100 percent. Apple Computer (AAPL: up $0.35 to $14.82, Research, Estimates) may be down, but the stock of Steve Jobs' other company -- computer animation pioneer Pixar (PIXR: up $0.88 to $40.29, Research, Estimates) -- is heading in the opposite direction.

Other stocks posting significant gains even as the NASDAQ has dropped more than 30 percent include Zip-drive maker Iomega (IOM: down $0.10 to $10.00, Research, Estimates), up about 20 percent; and controversial video-game publisher Take-Two Interactive (TTWO: down $0.24 to $18.10, Research, Estimates), up about 15 percent. Even Expedia (EXPE: down $3.81 to $44.60, Research, Estimates) -- which, like Amazon, skidded Wednesday after a better-than-expected earnings report Tuesday night -- is up for the year.

A couple of weeks ago I looked at several indicators of investor sentiment that contrarian investors tend to check for clues as to where the market may be headed: when these gauges reach extremes -- of optimism *or* pessimism -- contrarians see this as a sign that stocks may be headed in the opposite direction. (Once the market has reached the level of maximum pessimism, after all, there's nowhere to go but up.)

Sentiment was looking pretty negative two weeks ago, but it's gotten considerably worse. When we last checked in, in early July, UBS' Index of Investor Optimism was already down big time; it's plunged even further, to the lowest level since the gauge was started back in 1996, with only 32 percent of investors saying they feel optimistic about the markets' prospects this year.

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Meanwhile, several widely followed volatility indexes -- which basically measure investor nervousness -- have spiked upwards to levels at or near where they stood last September. And a couple of big magazines on the stands now feature bearish cover stories -- a classic bullish indicator. The latest Business Week features an actual growling grizzly bear on the cover; meanwhile, Time magazine asks if we'll "ever be able to retire."

Do these indicators suggest a new bull run is in the offing? Or even just that the worst is over? I wish I knew. I really wish I knew.

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