Investor Peter Boockvar warns bullishness is at dangerous levels.

He’s worried about investor optimism touching dot-com-bubble euphoria levels.

“Sentiment has gotten as ebullient as we’ve seen in early 2000,” the Bleakley Advisory Group chief investment officer told CNBC’s “Trading Nation” on Monday. “It’s all about that enthusiasm for stocks that should make somebody that is bullish call a time out.”

Boockvar cites the Citi Panic/Euphoria Model to support his case. It shows market euphoria, a contrary indicator, bouncing higher over the past couple of months.

“Sentiment is literally off the charts bullish,” said Boockvar, a CNBC contributor. “It typically means you are very, very vulnerable” to a market pullback.

Stocks ended Monday mixed. The tech-heavy Nasdaq, Russell 2000 and Dow Transports hit all-time highs. The broader S&P 500 and Dow closed lower, but they’re still near record highs.

Boockvar believes an inflation scare is the most likely driver to spark trouble.

“The 10-year [Treasury Note] yield is below 1%,” he said. “If you get a confirmed move above 1% in the 10-year, that would be the perfect catalyst to get a pullback in equity markets that would take out some of this froth and complacency.”

Boockvar, who has spent most of the year on inflation watch, predicts it’ll be the 2021 market story of the year.

“Commodity prices have risen. We’ve got CPI this week that I think is going to show continued price pressures, particularly on the goods side,” he noted.

According to Boockvar, there will also be fallout from central banks’ easy-money policies designed to cushion the pandemic’s economic impact.

“In 2021, you get a vaccine and you put Covid in the rearview mirror,” Boockvar said. “And, you get this inflation story. They are going to be left very flat-footed.”

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