The Stock market is not divorced from reality
Fundamentals always will determine the outcome, so when you see the market moving contrary to the fundamentals you will be tempted to think this is divorced from reality. In fact, what is happening is that you are not clear about reality.
The price of a stock is a delicate balance between buyers and sellers. When we are walking in the light it can be because buyers and sellers are weighing the evidence differently. However, bubbles are formed when sellers are "smart money" and buyers are "stupid money". By "stupid money" I am referring to retirement accounts. People all across the nation pick a few mutual funds and then every two weeks they use part of their paycheck to buy those funds. There is no thought at all given to the situation. They actually sell this as "dollar cost averaging". I call it stupid money. What happens is not that a moment comes when the market is divorced from reality, rather these retirement accounts have always been divorced from reality. They claim that is beneficial, you don't want people responding to the vagaries of the market. So there is always this background level of stupid buying as money comes out of paychecks every two weeks. The reason the market doesn't go straight up with all this buying is because there are those who are selling and as a rule doing it intelligently (otherwise they would go broke and then the market would go straight up).
So if you study the graphs on how stocks trade you will see there are three stages. Fist is accumulation. This is when smart money is buying the stock at the same level that stupid money is willing to sell it to them. Second you see the stock price break out of the accumulation phase because all the stupid money sellers are now gone. The people who are now selling are selling from stop loss contracts. You can see definite levels of resistance. If a few years ago a lot of people bought at $25 a share they have set a sale price at $25 a share so that they can get out without having lost any money. As a result it is easy to predict where the resistance will be. Ultimately you will reach the third stage which is "a new high". At this point it all depends on the fundamentals as to how high the stock will go. However, in order to buy stock you have to have sellers. The smart buyers have cleared the decks of all sellers, so what they do is have the stock spike up while at the same time hyping it in the news. People jump on the bandwagon and then all the smart buyers become smart sellers by selling and shorting stock. People who jump on the bandwagon when a stock is going straight up will jump off it when the stock is going straight down. So in this way they can generate more sellers, but all the time the average price is going up. If you carefully look at the graphs you can discern the value of the stock and the target price at this point.
But smart money is also "elite" money. They control the index funds. When smart money is ready to book their profits on a company they will get these index funds held by retirement accounts to buy up your stock. The stock will trade sideways because this is a good price for those who bought this in accumulation stage to book a profit. But once the sellers (the smart buyers who have now become smart sellers) are out the stock can take off. All you have is stupid money buying and no one selling. The price spikes despite the fundamentals telling you it is way overpriced. This is not because the market is divorced from reality but rather because the reality of the market is this delicate balance between smart money and stupid money.