The levitating stock markets continue to seductively entrance traders, powering to new nominal record highs day after day after day. No one believes a meaningful sell-off is even possible anymore, thanks to the vast deluge of central-bank monetary inflation. Sheer euphoria has set in as all perception of risk has vanished. This makes these stock markets extraordinarily dangerous, they are truly at topping extremes.
This move, particularly the one-sided 22.6% melt-up in the last 6 months, has bred unmistakable euphoria. Wall Street vehemently tries to deny this truth, but the definition of euphoria is “a feeling of great happiness or well-being, a feeling of great elation”. Does that not describe the outlook for the stock markets today? There are no bears left, everyone is incredibly bullish and expects no material selloffs.