The stock market’s comeuppance is coming, as bullishness gets extreme

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The stock market’s comeuppance is coming, as bullishness gets extreme, writes MktwHulbert: (OPINION)

The U.S. stock market’s five-month rally is coming to an end. Of course I don’t know when. That’s important to acknowledge, since this spring I presented arguments for why the market’s March lows could be retested in mid-June or mid-August. As many of you have emailed me recently to remind me, neither scenario came to pass.

The chart also highlights those occasions over the last couple of years in which the HSNSI has risen to be within the top 10% of all past readings—thereby meeting the criterion for excessive bullishness as set by some contrarians. You’ll notice that the market has proceeded to struggle on those prior occasions when this criterion was met.

The lesson I draw from the data is that we should keep our enthusiasm in check. The stock market was surprisingly strong over the last five months, but — as the famed British economist John Maynard Keynes liked to remind investors — trees don’t grow to the sky.

 

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MktwHulbert Something about a blind squirrel....

MktwHulbert the fundamentals still apply. they always do.

MktwHulbert Correction is coming

MktwHulbert It has to go from pessimistic to extreme first. That may take months.

MktwHulbert

MktwHulbert No major correction in the near future! How’s that for a Confident Bullish statement?

MktwHulbert Fed go brrrrr

MktwHulbert People have been saying this for a while though, so I don’t know. All I can say is that people who study stocks say they’ve never seen this before. Something like the stocks are valued as if the companies were going to make 20 times what they’re really gonna make. No idea though.

MktwHulbert 'Conditions are even stronger now for a correction,' If you just keep saying this, eventually you appear correct.

MktwHulbert Just my opinion we are going full Venezuela.

MktwHulbert No

MktwHulbert Yes and that's fine because everything's too expensive rn.

MktwHulbert I'm just gonna say it. That lightning strike looks like the Virgin Mary.

MktwHulbert stop crying wolf little kid....were going for 5,000

MktwHulbert This may be so But for us the SPY is in buy -above the cloud Historically it has proven smart to be long, not short, when our signal is in buy fintwit wallstreet investing usa

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