Even Some Technicals Are Now At Historical Extremes

I’ve written extensively about how valuations of the U.S. stock market are at historical extremes exceeding even 1929 and 2000. I’ve discussed how valuations are not at all reliable for predicting short-term movements but quite reliable for predicting returns over the next 10-12 years and, so, can be valuable for financial planning and investment strategy.

The implication of extreme valuations today being that annualized returns for U.S. stocks will likely be much closer to 0% than their 10% historical average over the next 10-12 years and with a lot of volatility in the interim.

However, now, we’re starting to see technicals hit historical extremes as well. Technicals are often-used for predicting short-term movements and identify key trading signals although they are still far from reliable.

They are interesting to at least monitor in order to get a feel for the market, investors attitudes towards risk, key trading signals others may be using, etc… Continue reading “Even Some Technicals Are Now At Historical Extremes”