Yes, it certainly seems like this market, with its day-in and day-out gains is bubblicious.
But if you’re looking for signs that investors haven’t completely abandoned rationality, BTIG’s Mike O’Rourke offers the following:
Currently, a great deal of market focus is on technical and sentiment indicators hitting extreme levels, i.e. RSI, low Vix, low Put/Call, New Highs, etc. Some solace can be taken in the fact that AAII’s 62% Bullish reading while optimistic is still not in “Sell” territory, but as we noted a few days ago we expected it to get there in coming months. Another fact in which investors may also find some comfort is that despite the S&P 500’s 8.6% gain year to date and a 16+% rally off the February 5th low, in the 71 trading days year to date, the S&P 500 has not registered a single up 2% day. In fact, there were only 2 sessions where the index added more than 1.5%, and one of those was the first trading day of the year. For context, of the 252 trading days in 2009, 27 posted gains greater than 2% and 28 sessions posted losses of greater than 2%. In both cases, 11% of sessions accounted for larger moves. In 2008, 12% of sessions registered gains in excess of 2%, and 16% of sessions registered losses greater than 2%.
Got that? No 2% up days, and only 2 1.5% up days? Now you feel better, right?
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