Document Type

Blog Post

Publication Date

8-5-2014

Contents

For technical traders, it may be time to sell. While the market has yet to make a "death cross," some other indicators are saying sell. In particular, a recent WSJ article identified three signals that recently occurred in tandem: overvaluation based on earnings multiples, extreme divergence in sector performance, and excessive levels of bullish enthusiasm. This combination has occurred six times since 1970, with each event resulting in market drops of at least 22%. Will this happen again?

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