Citi’s US stock market indicator warning sign – ‘euphoria’

Citi’s panic/euphoria model is used as a longer term indicator, indicating a 12 month direction.

Latest update is showing its bordering on the euphoric end of the scale, which is a bearish indicator  – suggesting negative returns over the next 12 months.
Citi say the rally has been due to:
  • a ‘TINA (there is no alternative) trade’ effect
  • new entrants to the stock market using the drop to buy into, the buyers not having “much background in the equity space”
Citi's panic/euphoria model is used as a longer term indicator, indicating a 12 month direction.