Euphoria is creeping into the market, and that’s giving me déjà vu: Trader

Signs of ‘euphoria’ seeping into the market?

Signs of euphoria are creeping into the market, and that's giving one trader déjà vu.

"I'm getting a little worried here," Matt Maley said Thursday on CNBC's "Trading Nation. " "We're starting to see some of the traditional signs of getting near a top being explained away for whatever reason."

Specifically, Maley pointed to the flattening yield curve — where short-term and long-term rates compress — as reason for concern.

"If you go back to 1999 and 2007, the yield curve was flattening for a year while the stock market was going straight to the moon, and that's exactly what we're having now," said Maley.

After a disappointing jobs number on Friday, the spread between the U.S. 2-year yield and U.S. 10-year yield fell to around 72.7 basis points, marking a 10-year low. Despite the move, some market participants didn't seem too concerned.

Michael Schumacher of Wells Fargo told CNBC that it was nothing more than a "head fake," explaining that investors shouldn't "leap to any conclusions" based on the report.

"Of course people explained it away that it didn't matter, until it did," added Maley. "I'm not looking for a repeat of any of those two years, but we are seeing some signs that some of the euphoria that people have been worried about is starting to creep into the market."

Furthermore, Larry McDonald of AGC Analytics cautioned that the number of new highs on the New York Stock Exchange has been declining, a sign of a "tired" bull market.

"New highs have been trending down for weeks, the amount of stocks above the 200-day moving average has been trending down," he said Thursday on "Trading Nation."

On the NYSE, 108 stocks hit a new high Friday. That's down from the 166 we saw a week ago, according to McDonald. "Over the last 30 years, rarely have we seen the S&P 500 rate to new highs with so little participation," he added.

"The biggest thing to watch for, however, I think, is the global growth story is picking up, and central banks around the world ... they're all trying to do this ... dovish hike, one and done," McDonald said.

The Bank of England hiked interest rates on Thursday for the first time in 10 years. Meanwhile, the Federal Reserve is expected to hike rates next month for only the fourth time in nearly a decade.

"But at the end of the day they could, because of this global growth surge, the central banks including the Fed could very well be forced to hike ... faster than the market expects," he explained. "And I think that's what's going to happen in the next couple quarters, and the market's not going to like that one bit," he added.

The Dow hit a record intraday high on Friday.