With the S&P 500 within about 8 % of its highest
level in history, with historically reliable valuation measures at
obscene levels, implying near - zero 10 - 12 year S&P 500 nominal total returns; with an extended period of extreme overvalued, overbought, overbullish conditions replaced by deterioration in market internals that signal a clear shift toward risk - aversion among investors; with credit spreads on low - grade debt blowing out to multi-year highs; and with leading economic measures deteriorating rapidly, we continue to classify market conditions within the
most hostile return / risk profile we identify — a classification that has been observed in only about 9 % of history.