While the Dow Jones Industrial Average flirts with the 11,000 mark, an increasing number of signs are pointing to potential trouble ahead. The markets have been on an incredible run over the last year with the Dow up more than 60 percent from its lows 12 months ago and the Nasdaq up a whopping 90 percent.

Despite the run-up, there are a few reasons to think that we’re close to a short-term peak in the market:

Price to earnings ratios – perhaps the most basic measurement of the market – are significantly above their average. Ratios in the Standard & Poors 500 index are 13 percent above the average since 2005. In contrast, just a year ago they were 40 percent below the average, suggesting that the market has come too far too fast.

Based on data going back 90 years, whenever the Dow has experienced a rate of change exceeding 40 percent in a 12 month period, it has often been a sign of a market peak (see the chart above). According to Bloomberg, in three cases when the market has experienced a rate of change above 40% it has only signaled a short term pause, after which the market went higher. However, in 11 other cases a rapid rate of change has been followed by sizable downturns, including the 1929 crash.

Interest rates will likely rise. Numerous factors are pointing to the Federal Reserve having to increase interest rates over the next year. While the exact timing isn’t known, it’s almost certain that rates will be higher in a year than they are now. Higher interest rates could pull some investors out of the stock market due to the higher yields offered.

Housing may not recover. The nascent housing recovery may have started to stall in many areas of the country. Rising interest rates, continued foreclosures, and the end of the federal first-time homebuyer rebate program will only make the situation worse.

The big question that no one can answer is: if the market falls, how much will it fall? Are we looking at a mild correction or another serious downturn?

The Bottom Line: with the stock market reaching new highs it’s time to exercise healthy caution. Several factors point to trouble ahead.