The overall conclusion being that this is a «healthy correction» or in other words a reset of
extreme bullish sentiment and rising leverage.
Not exact matches
Given the increasingly steep slope of the current market advance, along with the most
extreme valuations in history and the most lopsided
bullish sentiment in more than three decades, it's quite possible that this instance will be different.
Though nearly every morning prompts the phrase «Yup, they're actually going to do this again,» the steepening pitch of this ascent — coupled with record valuation
extremes, record overbought
extremes, and the most lopsided
bullish sentiment in over three decades — now produces the most
extreme «overvalued, overbought, overbullish» moment in history.
Moreover, this reversal occurred with valuations
extreme and
bullish sentiment clearly overextended.
The central issue is much more general: when
extreme valuations and lopsided
bullish sentiment are joined by deterioration in market internals, one faces an environment that couples compressed risk premiums with increasing risk aversion.