The Stock Market Looks Euphoric. Here’s How We Know.

Warning signs that the stock market is becoming detached from reality — or euphoric — are cropping up. 

The S&P 500 has had quite a run. It’s up almost 9% since the Oct. 4 bottom of a pullback. That rally has been broad, not driven by just a few stocks, indicating markets are widely optimistic about future earnings and economic growth. The Invesco S&P 500 Equal Weight Exchange-Traded (RSP), which weights each stock in the index equally and therefore shows the breadth of stocks rising or falling, has gained 7% since Oct. 4. 

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