Clouds on a very hot horizon

The dog days of summer that have sent thousands of baked New Yorkers to the beaches have done little to scare away the bulls on Wall Street.

The year-to-date returns for the markets are impressive. The Dow and S&P 500 are off to their best annual starts since 1999 — up 19 percent — while the economically sensitive Dow Transports has clocked in a 24 percent return.

Making the numbers even more eye-popping is the fact that the bull market is now more than 52 months long.

So. How long, how high? History may provide some answers.

As of this weekend, stocks are headed into a traditionally stagnant part of the year. Since 1950, the S&P 500 has fallen by an average of 1 percent between mid-July and Halloween, with September statistically the weakest month of the year for equities.

Extreme volatility in both directions is, of course, reserved for the wild month of October.

But for now, investors coming late to the party should be on the lookout for signs that the rally is getting long in the tooth. Here’s a list:

l Valuations: With stock prices up more than 140 percent from their 2009 lows, prices are starting to look rich compared with earnings. The S&P is now trading at 18 times earnings, higher than the multiples at its 2007 peak.

* Consumers matter: So far the 2013 rally has been partially propelled by the strength of the US consumer. But recent signs of a consumer slowdown in June could take the wind out of the market leaders.

* Gas prices are rising: One factor putting a damper on spending is a jump in gasoline prices. According to the AAA, the average price of a gallon of gasoline has risen 6 percent in the past two weeks.

l Revenues don’t rock: Companies can juice their earnings numbers, but they can’t fudge sales.

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Small investors’ new enthusiasm: Last week some $20 billion went into stock mutual funds, the biggest weekly inflow since June 2008 — and we all know what happened after that.