Warning Signs Mount: Investor Euphoria May Precede Market Decline as Recession Risk Rises
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Investor sentiment surveys like AAII and Investors Intelligence show extreme bullishness, historically associated with market tops
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Measures of actual investor positioning like Rydex ratios, margin debt, and volatility indexes also indicate high risk appetite
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Technical indicators show stocks are very overbought, similar to prior major market peaks
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Full-time employment is declining sharply, typically recession-like
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With the economy likely entering a recession soon, current investor euphoria could precede a significant market decline