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.


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.

  1. Overvalued

    A stock with a current price that is not justified by its earnings ...
  2. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  3. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
  4. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  5. Fully Valued

    A stock whose price analysts believe reflects the market's recognition ...
  6. Yield

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