Has the Stock Market Hit Its ‘Psychological Peak’?
- Speculative sentiment tends to peak months before stock prices
- Look to 2007 for playbook of how the topping process unfolds
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Call it a correction overdue, but to Doug Ramsey, the convulsions that have shaken equity markets for the past week have hallmarks of something bigger, perhaps an end to the era of tranquility that has reigned on Wall Street for half a decade.
To a greater extent than 24 previous pullbacks since 2009, he says, this one arrived to distinct signs of froth. Bitcoin’s 20-fold run-up. Individuals streaming into the market. Equity funds getting record cash. In contrast with euphoria years like 2017, bond yields are rising with increasing momentum, something that has historically spelled trouble, according to the chief investment officer of Leuthold Group.