The following set of conditions is one way to capture the basic "overvalued, overbought, overbullish, rising-yields" syndrome:
1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% (Investor's Intelligence)
These are observationally equivalent to criteria I noted in the July 16, 2007 comment, A Who's Who of Awful Times to Invest. The Shiller P/E is used in place of the price/peak earnings ratio (as the latter can be corrupted when prior peak earnings reflect unusually elevated profit margins). Also, it's sufficient for the market to have advanced substantially from its 4-year low, regardless of whether that advance represents a 4-year high. I've added elevated bullish sentiment with a 20 point spread to capture the "overbullish" part of the syndrome, which doesn't change the set of warnings, but narrows the number of weeks at each peak to the most extreme observations].
The historical instances corresponding to these conditions are as follows:
December 1972 - January 1973 (followed by a
48% collapse over the next 21 months) August - September 1987 (followed by a 34% plunge over the following 3 months)
July 1998 (followed abruptly by an
18% loss over the following 3 months)
July 1999 (followed by a
12% market loss over the next 3 months)
January 2000 (followed by a spike
10% loss over the next 6 weeks)
March 2000 (followed by a
spike loss of 12% over 3 weeks, and a 49% loss into 2002) July 2007 (followed by a 57% market plunge over the following 21 months)
January 2010 (followed by a
7% "air pocket" loss over the next 4 weeks) April 2010 (followed by a 17% market loss over the following 3 months)
December 2010
Since Investor's Intelligence data is not available prior to the mid-1960's, we get a few additional observations if we drop the "overbullish" criteria in prior years. These include December 1961 (followed by a 28% market loss over the following 6 months) and a few quick market plunges in the mid-1950's. I've excluded these in the list above because we don't have associated sentiment readings.
http://www.hussmanfunds.com/wmc/wmc101213.htm