All else equal, besides a possible slight rebound from last week and Japan's move to quantitative easing, there’s no rational reason for the S&P to be this high - most reasons point against it. We’ve had QE for the past decade and low interest have become the norm - until now. If anything, investors should fear the popping of a bubble that has been created through the artificial interest rate ceiling that has defined our economy since Alan Greenspan decrease of the federal funds rate to 1% after September 11th, 2001. Why not look at a history lesson? It is easily arguable (although not necessarily provable) that Greenspan's increase of interest rates in 2000 led to the popping of the dot-com bubble. Rationally, investors should share a similar sentiment and be wary of the effects that the increase in interest rates could have. Unfortunately, pointing out where the bubble is in 2000 would have been easier ("Oh, your company has no revenue but you have a large amount of 'engaged shoppers,' people who spend at least three minutes on your site? Oh, you're going places.) However, we still see similar sentiments today (**cough** Snapchat **cough**cough**), where a user may spend actually less than three minutes to take a picture and send it to a friend. Monetizing Facebook news feeds sounds much more practical for the vast amount of time that users spend on the site, but Snapchat? Users often spend mere seconds on the app, although its individual usage amounts are heavy.
Point is, investors should fear a bubble. True, we do not know exactly where (if we did, then we'd never have to worry about a recession) as with crazy tech valuations in 2000's, but because the bubble seems to be more widespread amidst mediocre growth (not that the nominal growth has been mediocre, but real growth has arguably been pumped up by QE to artificially show GDP increases).
All notes taken, it has been six years since the financial crisis, and recessions usually happen at least every decade. Prepare for a new market correction, much greater than the one two weeks ago.
Of course, everyone's question is "when?"
S&P chart taken from Bloomberg.com.