Stock Market vs. Liquidity Shows A Weird, Extreme Euphoria

I developed a Composite Macro Liquidity Indicator some years ago as a way of combining various measures of bank deposits, bank investments and trading activity, foreign central banks and Fed liquidity provision. For the past 8 years, the performance of the US stock market has closely tracked this indicator of composite liquidity. Today there are signs that the market has become overly euphoric. Although I can't say specifically from this data when that euphoria will end, it seems highly likely that it will in the not too distant future. The end of these periods of unusual euphoria are never pretty

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