A dicey situation reminiscent of the dot-com bubble may be unfolding on Wall Street.
According to BTIG's Julian Emanuel, the market's record price action is mimicking late 1999, and it could spark a 10% to 20% correction within the next month.
"Be very much aware of the fact that if and when it reverses, the consequences could be severe," the firm's chief equity and derivatives strategist told CNBC's "Trading Nation" on Monday.
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"We're in a time where the impossible has really become commonplace," said Emanuel. "If we had said inflation would be at 30 year highs and [10-year Treasury Note] yields would be at 1.3% while the S&P would be at this level a year ago, no one would have believed you, me or anyone else."
Emanuel points out the record price momentum is so strong, it's overshadowing serious near-term risks associated with surging Covid-19 delta variant cases, higher inflation and what's next for Federal Reserve policy.
"The temptation may be to continue to go with it," he said. "This is a time to retain emotional control."
Emanuel believes euphoria could help drive the S&P 500 to 5,000, a more than 10% jump from Monday's close. However, he warns the move would add more near-term danger into the market.
"What we don't want is for people to get so overly committed in that race to 5,000 potentially that they become uncomfortable and overexposed to equities," he added.
"That's usually foretold of a pullback. That's what happened last September," noted Emanuel. "The other thing that concerns us is this plunge in consumer confidence that we've seen."
Emanuel, a long-term bull, suggests investors with a long time horizon should embrace market a setback.
"Be mentally prepared to buy down 10%, 15%, maybe even 20%, because the long-run trend is higher and pullbacks having been bought have been rewarded all along the line," Emanuel said. "We all know that September has a record of being a difficult month to navigate that ultimately yields to the buying opportunity in October."