It’s moments like this when technical indicators can provide very valuable insights. Glancing at a quick chart or a statistical data set can be enormously enlightening. The current short-term technicals could be a reason for some concern here as we are reaching unprecedented levels according to some indicators. When markets make extreme movements we often enter brief periods of statistical anomaly.
The current cause for some concern is the market’s extraordinary overbought conditions based on some metrics. The most eye opening of which is the % of S&P 500 stocks above their 50 day moving average. The current reading of 94% has been registered just once in the last 10 years. I’ve provided both long-term and short-term charts above.
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