More Signs Of The Negativity Bubble
More signs of the negativity bubble surface on a daily basis.
There are front page articles on stagflation fears, the media talks about bank write-downs endlessly, the general public thinks the odds of recession are near 100% and that the outlook for the stock market is terrible.
And the fact that the fed funds rate is 3.00% and going lower next month seems to be lost on most market participants. Not to mention that unlike 1999-2000, stocks are historically cheap relative to both earnings and interest rates.
The chart above shows that short interest on the NYSE just hit a new record. Yes, record. This is as much evidence of the current negativity bubble as anything. And while I am not trying to use this to call a bottom in the stock market, at some point it will matter and will likely lead to a huge rally.
Just something to keep in mind...