For several months we’ve noted that the US equity market was entering a kind of mania that was indicative of a top forming.
In particular we noted:
1) Investors piling into stock-based mutual funds at a pace not seen since the Tech Bubble.
2) Margin debt (debt investors take on to buy stocks) at a record high.
3) Market leaders (Tesla, Netflix, etc.) showing clear signals of investor rotation.
4) Corporate profit margins at record highs and primed to fall.