I love the smell of risk euphoria in the morning.
Monday’s theme was “equi-phoria”, a state of acute psychosis that pervades the warped minds of E*Traders, pundits, and punters alike at the tail end of a rally that’s left multiples stretched to historic extremes and now finds stocks, bonds, and credit the most simultaneously overvalued in 100 years.
To start the week, we brought you the latest read on BofAML’s “risk-love” indicator, which is sending a bright, red “bearish signal” thanks to low vol. and “humans responding bullishly to surveys” (and yes, that latter bit is hilarious).
We also showed you the following chart (part of a series of amusing visuals) which suggests the MSCI World is grossly overbought:
Conveniently, Goldman is out with a nice companion visual to that. As the bank notes, “the MSCI World ($) is currently at its longest streak in history without a 5% correction”:
What can we say but…