The upshot is that investors appear to be expecting earnings growth either to beat analysts' estimates in the coming year, or to continue to strengthen in the years ahead. Of course, it is also possible that less fundamental reasons are driving stocks higher, such as a desire to hedge against expected inflation, or merely to improve portfolio performance by chasing stocks higher.
Either way, Gibbs believes that a bit too much optimism has been baked into large-cap stocks.
"I'm not necessarily saying that markets need to go down, but I would expect to see some consolidation between now and the end of the year," she said.
At the very least, December won't prove to be as sweet as November, in her opinion.
Yet others warn against overthinking moderate changes in market valuation.
"Yes, we are near-term overbought," Ari Wald, head of technical analysis at Oppenheimer, concedes. "But not to miss the forest for the trees, we do think the longer-term trend here is bullish for the S&P 500."
"The charts are telling us that higher valuations are justified, and a repricing is needed for the market," he said Monday on "Trading Nation."
Specifically, stocks that tend to rise along with the market are doing well, and names that tend to be less volatile are lagging.
This would seem to indicate that investors are becoming more comfortable with taking risk. And hence, to Wald, higher valuations will not stop investors from continuing to buy stocks.