"Overbought does not automatically mean bearish"

1. Hikes vs. cuts. "Dear Kevin Warsh Later today, you will be sworn in as the next Chairman of the Federal Reserve. Congratulations. You got the job by convincing the President you share his vision that the Fed needs to cut rates. The problem is that today, on your first day as Chairman, the market is pricing in a 64% probability that rates will HIKE before the end of the year. Good luck!"

2. Risk Sentiment Indicator. "Despite the blistering rally in US equities, risk sentiment remains neutral on our US indicator, which suggests the rally could be durable as many investors have not actively participated."

3. Most-hyped IPOs. "Across 15 highly-anticipated tech IPOs since 2015, the median name lost 16.6% in the six months after its day-one rally."

4. Overbought SPX. "Overbought conditions deserve respect, particularly after such a powerful run from the March lows. But overbought does not automatically mean bearish. Bearish price action occurs when bullish patterns start to fail; so far, that has yet to happen."

5. EPS estimates. "The S&P 500's 2026 EPS expectation has risen over 7% since the start of the year, from $308 to $331. This isn't 'pulling forward' from 2027, as 2027 EPS expectations have jumped 7% as well, from $355 to $380."

ICYMI