Thursday, August 6, 2009

Credit Suisse - Market Now At Euphoric Levels

From ZeroHedge:

Credit Suisse's global risk appetite index is now at "Euphoria" levels, matching the highs from November 2007, and has retraced from "Panic" at the fastest rate since the October 1987 crash. Next official stage on this index: "Irrational Exuberance" although at least now it has gripped the entire market, not just tech stocks.

(click to enlarge)

Here's another way of looking at it, from Bespoke:
Bespoke's Sector Snapshot

lt has been awhile since we last posted our sector trading range charts, so below we provide an update. For each sector below, the red zone represents between one and two standard deviations above the 50-day moving average. The green zone represents between one and two standard deviations below the 50-day. Moves into or above the red zone are considered overbought, while moves into or below the green zone are considered oversold.

As shown, the S&P 500 is currently trading right at the top of the red zone, meaning overbought levels are present. We've been trading in the red zone for a couple of weeks now, but we haven't quite moved above it. Any move above the red zone now will mean the index has broken above the top end of its upward sloping trend channel.

The Financial sector is the most overbought of the ten S&P 500 sectors at the moment. Every sector except for Energy and Utilities is currently trading in overbought territory


and eight more.