Optimism is a good thing: just ask an unstimulated Larry Kudlow. Yet when optimism is the only thing, you have problems. These tend to materialize whenever any event occurs that shows just how disjointed reality and hope are in actuality. Of course, the greater the divergence, the greater the downside shock. And if the Conference Board's numbers are any good, we are set for a harsh reintroduction with reality.
Looking at historical data, the spread between the Leading Index and the Coincident Index is that widest in history: the US population is more "hopeful" at this moment than it has ever been. The last time the divergence was this wide, was December 1964.
And below is how the Leading-Coincident Index behaves with relation to the broad market.