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Is the stock market bull run now over?

FOMO no more: This trading strategy could be your winning ticket
Ana Zirojevic

After an exceptionally bullish period for the stock market, during which many of its assets have reached their all-time highs (ATHs), it seems these times might be drawing to an end as the sentiment switches back from ‘greed’ to ‘neutral’ for the first time since November.

Specifically, the emotion driving the stock market at the moment is pointing at a ‘neutral’ at 50, where it moved after a previous close in the ‘greed’ zone, and one month after leaving the ‘extreme greed’ area, according to the recent data shared by the markets analyst Barchart in an X post on April 4.

Stock market fear & greed index
Stock market fear & greed index. Source: Barchart

According to the analyst, this is the first time that the stock market has closed in the ‘neutral’ zone in the last five months, or since November 15, 2023, which suggests that the period of bullishness in the stock market might be coming to an end, a notion supported by some of the most renowned strategists.

Indeed, one of the best examples is cybersecurity company Palo Alto Networks (NASDAQ: PANW), which has brought losses to one of its most renowned traders, the Representative and former Speaker of the United States House of Representatives, Nancy Pelosi.

Palo Alto stock price 1-month chart
Palo Alto stock price 1-month chart. Source: TradingView

AI stocks most vulnerable

In particular, one of the most vulnerable sectors of the stock market in the United States could be the artificial intelligence (AI) industry, where the renewed hype triggered by its technological advances in more recent times has pushed the prices of AI companies’ shares sky-high.

As it happens, Albert Edwards, a global strategist at banking behemoth Société Générale, notable for predicting the dot-com bubble, warned that, between the Federal Reserve not being restrictive enough and the enthusiasm about the AI boom, the stock market had become a full-blown bubble.

Meanwhile, the chief global equity strategist at JPMorgan Chase (NYSE: JPM), Dubravko Lakos-Bujas, earlier told clients that excessive crowding in the best-performing stocks was increasing the risk of an imminent correction, which could strike at any moment, as Finbold reported on March 28.

Ultimately, the stock market crash/recession could be slowly approaching, but the trends can sometimes make surprising twists, which is why doing one’s own detailed research and weighing all the risks is critical before investing any significant amount of money.

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