Investing.com: Goldman Sachs speculative trading indicator hits record high (as stock market hits new high too,)

Gaius · July 28, 2025, 10:14am

Goldman Sachs speculative trading indicator hits record high

Investing.com – Goldman Sachs said in a note Friday that its Speculative Trading Indicator has surged to historic levels, reaching its highest reading outside of the dot-com and pandemic-era bubbles.

“Our Speculative Trading Indicator has increased sharply during the last few months,” Goldman Sachs wrote, noting the current level is now the highest on record apart from 1998–2001 and 2020–2021.

The rise is being driven by “elevated recent share of trading volumes in unprofitable stocks, penny stocks, and stocks with elevated EV/sales multiples.” . . .

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Over-speculation does not always end in a crash.
But crashes don’t happen any other way

Gaius · July 28, 2025, 10:16am

Here it is visually.

In recent history (~25 years)this has happened twice.
Each time the market bounced around a little,
Each time one of those bounces ended in a crash

Gaius · July 28, 2025, 10:20am

Another thing that is not a definite indicator is when I turn bearish.
Silly me, I was part of a large crowd who turned bearish way back here
(and missed a lot of opportunity.)

Gaius · July 31, 2025, 5:29am

This is world stocks not just the US bu,t umm . . , it si a strong signal that stocks are overpriced and a crash is more likely than normal.

Gaius · August 4, 2025, 1:16pm

Hmm
it looks like almost all the current market surge is related to
(caused by??) an increase in buying stocks on margin.

(There is no similar correlation of earnings or assets to current stock price so they are notthe likely drivers.)