I have expressed my concern about the state of the equity market before, but indicated that the bulls appear to remain in control despite the poor fundamentals. In a post entitled the most hated rally in Wall Street history, Barry Ritholz wrote last week that:
Most bull moves do not end when they are hated, they come to a halt and reverse when they become over-owned and over-loved.
We are not there yet.
The latest data from the AAII survey shows that, despite the equity rally, individual investors are not super bullish yet. 
Mark Hulbert’s survey of newsletter writers as of the end of September also tells the same story - there is no sign of bullish extremes. Morningstar also concluded that fund investors are still not buying into the stock market rally, based on their analysis of mutual fund flows data.
Another market bubble?
Is a bubble forming in the stock market?
I believe that the term “bubble” is over-used. Current readings from sentiment models suggest that the lack of investor bullishness may serve to put a floor on any near-term market weakness. While there are big risks from the fundamentals, it may be too early for traders to contemplate shorting the market here.
A frothy market? Definitely.