“Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” -Sir John Templeton


Too much euphoria is a contrarian indicator. Markets really revolve around human dynamics and emotion. Regardless of what we believe, we make decisions emotionally and then justify them logically. That is why we believe we are acting logically when we are actually acting emotionally. Are you logically looking at the market or emotionally?


Warren Buffett said “Be fearful when others are greedy.”


There is a “Panic vs Euphoria” index provided by Citigroup. It states that anything measuring over 0.41 is getting into euphoria territory. The current and highest level ever measured in this index is right now: 1.89! That is five times the euphoric indication level! For comparison the 2007/2008 market hit .05 before it crashed down. The dot.com bubble burst when euphoria hit a record 1.4. Now we don’t know if a downtur ...