This may not come as a surprise, but: I agree with him. Oh I know, every time Alan Greenspan says something related to "irrational exuberance" immediately the comments come that he said it in 1996 and stocks didn't blow-up until 2000. While that may have been true then it didn't invalidate his premise nor is the timing relevant to now. Back then people ignored him and went full bubble mode until it popped.

Indeed this one may still go on for a while and 2018 upside risk targets remain despite this week's first pullback action of 2018. However this week's corrective move coincided with a sustained technical breakout in the 10 year yield above its 30 year trend lines. Stock clearly reacted and not favorably.

Which brings me precisely to the relationship between stocks and bonds. If Alan Greenspan is correct then a chart I have been watching and musing about for a while may be the ultimate bear chart.

I've shown this chart before, but let me walk you through the theory of it.