Investors went overly bullish into 2018. Despite the macro risk factors of high asset valuations, rising interest rates and perpetually increasing debt, investors’ sentiment peaked at the highest level in almost five years in January 2018. Even Bloomberg asked: The Stock Market Never Goes Down Anymore?Volatility, measured by the VIX, dropped below 10. But when everybody is a bull, who is left to buy? And this is exactly what happened.
Part of me feels great having had predicted this summer that oil prices, then in the mid-$40 a barrel range, were due to rise in a big way.