A much-watched stock market indicator that called the 2000 crash is signaling expectations are running too hot - setting up investors in many S&P 500 sectors for big disappointment, says a just-released report from Bank of America. Fifteen of the 20 stock metrics BofA monitors signal the S&P 500 is already "statistically expensive."

The great Bollinger Bands are one of the first things we must learn when analyzing time series. This is because of their sound statistical reasoning, their wide adoption across market participants, and their success when deployed in trading strategies. We can also see other variations that resemble the...