Following Goldman’s exposition of the ‘devils’ in the markets’ details, we thought the following not-widely-followed indicator was of interest. As UBS’ Art Cashin warns it’s “worth keeping an eye on.”
U.S. stocks and bonds are sending the same warning signal that they did before share prices peaked nine years ago, according to Chris Kimble from KImbleChartingSolutions.com.
The ratio between the S&P 500 Index’s value and the price of an iShares exchange-traded fund for Treasury bonds (TLT) is now at record highs.. so what happens next?
Kible also added that “Do find this interesting at this time, bullish sentiment on $TLT now stands around the 10% level, which happens to be the same level it was in mid 2007!”
Additionally, as Ed Yardeni notes, valuations are now at their highest in this bull market…
As we noted previously, despite Goldman’s recent bout of euphoric optimism, predicated only by the outcome of a presidential election which, as Goldman itself said, is very much unclear, the firm clearly admits that, and we quote,
“S&P 500 valuation is stretched relative to history on nearly every fundamental metric. At the aggregate level, the S&P 500 index trades at the 85th percentile of historical valuation relative to the past 40 years. For portfolio managers, the more important fact is that the median S&P 500 company trades at the 98th percentile of historical valuation..”
… So you’re saying there is a 2% chance?
via http://ift.tt/2g3vFg9 Tyler Durden