AVIV Ratio: Gauging Market Sentiment š_
The AVIV Ratio helps us understand the average active investor's profit (on paper) š¤. This metric gauges if the market is:
š„ Overheated: Due for a correction
š Has room to grow: Potential for further upside
_Bull Market Warning Signs šØ_
Bull markets typically end when:
š All types of investors show big profits
šØ Too many people want to sell, while fewer new buyers are willing to pay high prices
_Current AVIV Ratio Reading š_
The AVIV Ratio hasn't hit its extreme level (+3Ļ) yet š āāļø. This suggests:
š Investors aren't sitting on excessive profits
š The market might have more upside potential before profit-taking becomes too tempting
_Investor Takeaway š_
Keep an eye on the AVIV Ratio to gauge market sentiment. If the ratio hits extreme levels, it may be a sign that the market is due for a correction š.
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