An indicator that was developed by Goldman Sachs which measures future bear-market risk has risen to its highest level in 50 years.   Goldman’s Bull/Bear Index, which is based on the metrics below is at its highest level since 1969.

  • Equities valuations
  • Growth momentum
  • Unemployment
  • Inflation
  • Yield curve

Goldman’s chart below depicts that the indicator also spiked to extremely high levels prior to the crash of 1987, the 2000 bursting of the dotcom bubble and the crash of 2008.

On September 5th Bloomberg reported that Citibank’s Bear Market indicator was also signaling that the US market was due for a significant correction. See “Goldman Sachs Joins Citigroup in Flashing Warnings on S&P 500”.