When things get extreme it indicates a probability. Statisticians observe that extreme data points can indicate a probable trend, and in the case of financials, a decisional path.
Weak economic data combined with a convergent yield spread in the bond market, for example, indicates that the Fed may decide not to normalize rates. The data is still too extreme to chart a normal path.
Although equity values usually languish along summer’s path, indices are at record levels.
The narrowing spread between junk bonds and the 10-yr Treasury is said to be a bullish signal, but the bull is in the bear. The good is actually measuring how bad it really is.
There is every indication that the bulls will keep running to the store — grossing financial assets to chase up the yield that normally associates with taking the risk.
If you haven’t been selling into the strength, it’s a long way down to normal levels, yielding to less extreme measures.