We all know that current financial valuations are not sustainable in the long term and that sooner or later we will find another bubble to burst.
The same was said in 1997 and 1998, however, it was not until 1999 that we saw a significant change in the market.
Remember, Dic 6, 1996, the former FED CHAIRMAN, GREENSPAN surprised the world by questioning whether asset prices were reaching unsustainable levels.
Alan Greenspan made his famous speech wherein he asked if “irrational exuberance” had begun to play a role in the increase of certain asset prices.
Now the markets are quite different and the markets are still the best tool we have to measure financial sentiment. I believe that the music still playing and more people will start to join the party now the volatility is back again under 30 in a monthly basis.
Maybe we find another 30% drop a few months from now but it is clear to me as of today that less and less people is worried about that now than 2 months ago. Of course this also affect the way I trade.
The risk reward is in favors the bears but I think bulls will take over..
