Jim Paulsen, a veteran market strategist, says the U.S. stock market has used up most of the room it traditionally relies on to climb higher, even as slowing momentum starts to press against record valuations.

Paulsen, a longtime economist who spent years as chief investment strategist at the Leuthold Group, made the case on CNBC’s Closing Bell Overtime. He pointed to profits, valuations, and investor positioning all sitting near historic extremes.

Paulsen Flags Record Stock Market Valuations

Paulsen said in July that the S&P 500’s price level sits about 60% above its post-World War II trend line. That level has only been matched once before, near the peak of the dot-com bubble.

Trailing 12-month earnings are also 60% above their own…