Ovoboby

AAA

DEFINITION of 'Ovoboby'

A condition in which a market is considered to be overbought, overly bullish, overvalued and is experiencing upward pressure on Treasury yields. If the market falls into this condition, it is thought to be a warning sign to investors of potential near-term market downturns along with the potential for longer term negatives.

INVESTOPEDIA EXPLAINS 'Ovoboby'

This term was coined by John Hussman, a fund manager and market researcher, to reflect certain market conditions. The market is considered to be overbought when the S&P 500 is at a four-year high and is also trading 5% higher than the levels of the index six months ago. The market is considered to be overly bullish when the bullish sentiment of advisors within the Advisors Sentiment Index, created by Investors Intelligence, is above 53%. The market is considered to be overvalued when the price/peak earnings of the S&P 500 are above 18. The yields in the market are considered to be facing upward pressure when the yield on a three-month Treasury is higher than it was six months earlier.

RELATED TERMS
  1. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  2. Overvalued

    A stock with a current price that is not justified by its earnings ...
  3. Yield

    The income return on an investment. This refers to the interest ...
  4. Fully Valued

    A stock whose price analysts believe reflects the market's recognition ...
  5. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  6. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
RELATED FAQS
  1. Where can I find the P/E ratios for the Dow and S&P 500?

    When it comes to valuing stocks, the price-to-earnings (P/E) ratio is one of the oldest and most frequently used metrics. ... Read Full Answer >>
  2. Is the drugs sector better suited for active or passive investment?

    Active management and passive management represent two vastly different approaches to investing. Active investors keep their ... Read Full Answer >>
  3. Why are growth investors attracted to the chemicals sector?

    The chemicals sector attracts growth investors because two of its three segments beat the broader market when the market ... Read Full Answer >>
  4. Which stage of the economic cycle is most favorable for the chemicals sector?

    The expansionary stage of the economic cycle is most favorable for the chemicals sector. Each of the chemical sector's separate ... Read Full Answer >>
  5. What are the benefits of investing in a cyclical stock?

    Cyclical stocks tend to be highly correlated with the overall business cycle, so an investor can invest in a cyclical stock ... Read Full Answer >>
  6. Why would growth investors be attracted to the electronics sector?

    Growth investors gravitate toward the electronics sector because its higher-than-average volatility, particularly in the ... Read Full Answer >>
Related Articles
  1. Trading Strategies

    Market Strength Tutorial

    Here you can learn about some of the indicators that traders and brokers use to determine the direction and strength of the market's present trend.
  2. Investing

    What A Rate Hike May Mean For Stocks

    By the end of the year, investors will likely be contending with the first Federal Reserve (Fed) rate hike in nearly a decade.
  3. Investing

    The Case For Stocks Today

    Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking.
  4. Economics

    What are Pork-Barrel Politics?

    Pork-barrel politics is a form of patronage whereby politicians favor their constituents in exchange for benefits such as campaign donations and votes.
  5. Investing

    When Will The Bull Market End?

    A few weeks ago, the current bull market celebrated its sixth anniversary, making it one of the longest in history.
  6. Investing

    Welcome Back, Volatility

    Volatility is likely to resurface as the Federal Reserve gets closer to adjusting its monetary policy stance, even if that adjustment is a measured affair.
  7. Investing

    Wizards Of Odd: A Trip To Tech Land

    I spent a couple of days in Silicon Valley, and here are some key lessons I learned after meeting with a number of tech CEOs and venture capitalist.
  8. Technical Indicators

    This Indicator Should Always Be Part Of Your Strategy

    The relationship between price, 200-day EMA and its slope of generate useful patterns that assist in price prediction and trade management.
  9. Charts & Patterns

    Trading Against the Grid and Away from the Herd

    The best trade could be in the opposite direction when a classic price pattern doesn’t behave according to perfect rules.
  10. Professionals

    What is a SWOT Analysis?

    SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a management tool used to identify strategies for success. It may be used to guide individual thinking, group ...

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center