Wall Street's Most Bullish Strategist Is Worried About This Chart

On Tuesday, Jefferies strategist Sean Darby cranked up his year-end target for the S&P 500 to1,673 from 1,565, making him the most bullish strategist on Wall Street.

"Better-than-expected 4Q earnings and forward guidance, a broadening in the earnings base, ongoing share buybacks and continuous rotation out of fixed income ought to keep US equities well bid," wrote Darby.

Business Insider recently asked Darby for the chart that worried him most.

"The recent trend in mergers and acquisitions might indicate that financial assets have become overheated in the short-term -- or it may indicate that Fed policy is beginning to work in raising animal spirits," said Darby.

For now, he seems to be more convinced of the latter.

Here's the chart Darby sent us: