Ovoboby

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.


Filed Under: ,

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an 80% loan-to-value ratio, the second position lien has a 10% loan-to-value ratio and the borrower makes a 10% down payment. 80-10-10 mortgage transactions are piggy-back mortgage transactions, and are frequently used by borrowers to avoid paying private mortgage insurance.
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
Trading Center