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Michael Batnick: The Most Bullish Signal In The World
.This will be the 777th intra-day all-time high since 1982* .All-time highs have happened on just over 8% of all days .The average 1-year return is 10.2%. The average 1-year return following an all-time high is 22.7%. This does not include dividend Regards, Ted https://theirrelevantinvestor.com/2019/10/28/the-most-bullish-signal-in-the-world/
That Big Money Poll caught my eye too in this weekend’s Barrons - Bears rise to a two decade high. Last month we saw where worried investors were flocking to money market funds bringing their assets to their highest level since 2009. Lot of trepidation for a market at all time highs. Very bullish from a sentiment standpoint. Meanwhile it appears the most crowded trade of being long bonds is slowly unraveling with long term bonds ( 10 year) on their way to the 2.50 to 3% area over the next year.
Interesting statistic. I guess there is usually some fairly long lasting momentum behind a market that is bullish enough to set an all time high. (The current market has apparently priced in some kind of an interim trade deal.)
Here is an interesting look at this topic that adds an average trailing earnings P/E ratio to the market peak chart. The article's author calculates that the current P/E ratio was about 10% above average at yesterday's market peak.
Here is the article's takeaway thought about current market conditions.
To me, this analysis suggests that the current earnings multiple with the market at an all-time high is fair to slightly elevated. Given still low rates and monetary accommodation and political capital being spent to forestall an economic downturn, the economy may once again manage to extend its historic expansion. High equity multiples, low interest rates, and perhaps slower earnings growth all suggest lower forward returns on average. I would expect market participants to continue to reprice the stage of the business cycle, which will create episodic volatility.
Comments
Here is the article's takeaway thought about current market conditions. https://seekingalpha.com/article/4299923-p-e-ratios-market-peaks