To many this overreaction on the upside does not make much sense. To me, the answer lies on clues from 1996, when Greenspan spoke of the irrational exuberance of the stock market. The never ending paradox was that by asserting irrational exuberance of markets, Greenspan inadvertently offered a normal explanation to the overreaction.
That is, the overreaction on the upside being within the realm of "normal" was when markets became confident. Today the false positive reasoning i.e. the lack of investment alternatives is what drives investors to equities, is what reinforces stability and the continuing overreaction on the upside….