Laserjet3051's post is an excellent one. The reason everyone's bullish about their own prospects right now is the same reason why stocks are richly priced; employment is high, income is growing, they have spare cash to be buying stocks, and they see things getting better for them in the next few years. Conversely, in a downturn everything works in reverse. The stock market, economy, and peoples' individual circumstances are not separate things. People tend to sell low because they have little choice.. they become forced sellers. When you have no income, or much reduced income, losing sleep because you're worried about being foreclosed, this creates FEAR. Buying cheap stocks is probably the last thing on your mind.
I don't think "everyone's bullish" right now because the good times are rolling, we've forgotten the past, or we think things are "getting better" (financially, I assume you mean). I fully expect a major market pullback soon - like 30% plus. However, I expected that in 2018, with CAPE moving well into the 30s. And 2017 with the threat of nuclear war, Mueller getting started, and one of the longest bull markets on record. And 2016 with Trump being elected, the Brexit vote, etc. And 2015...
However, because I stuck to my IPS and just kept buying, I am now at a point where even if the markets drop 50% I'll still never need to work again. Ok, if they drop 70% I'll be properly freaked out. But 50%? meh.
The point is, I've learned I'm spectacularly bad at predicting what the markets are going to do and if I'd listened to my fears I wouldn't be FIREd right now because I'd still be waiting to buy the dip. It's absolutely true that someone is going to come to these boards with excellent reasons why we should all get out now and start hoarding cash, and everything is going to crash right after they say that. That's a 100% guarantee. Just like it's a guarantee that someone's going to pick the Powerball numbers in an upcoming drawing. In both cases we KNOW that's coming, we just have no idea which of the doomsday prophets will be correct or when it will happen.
So yes, when the next crash comes I might have to sell some of my VTSAX when it's down - way down. But because I didn't freak out when I started investing in the early 2000s when the tech bubble burst and I didn't change anything when my investments plummeted in 2008-2009, I'm now in a position where I DGAF what the markets do next. I know I can't predict it. But I also know I have enough that even if there's a major crash I can still live on the savings I built up ignoring all the people who said there was a bubble - even when they were right.