Perhaps the market is finally entering that 5th stage of disbelief.
To review the five stages, the market has surpassed the first three.
Stage One-Sellers experience exhaustion.
Stage Two-Investors who were long early on go to cash.
Stage Three-Bears begin to buy as optimism emerges.
Stage Four, Bears begin to call a top because they cannot believe the market’s strangeness. They think the Bulls are delusional.
But Stage Five, the Bears finally throw in the towel and buy!
And that’s not all.
Retail investors pile in. The economy begins to run hot. The market becomes crowded.
Everyone has something to crow about.
After a 10% correction in Semiconductors, SMH has moved up the last 4 trading days.
The S&P 500 had only a 3% correction from the early June highs. SPY still has a little bit more to reach the 245-peak.
The Dow barely corrected and today, made a new all-time high.
Blue Chips and Tech-the stuff dreams are made of.
Today I read, “Til when a crow becomes euphoric, the other crows investigate if there’s Dank Memes so they can visit in the future.” Flopus
For the market, the other crows have investigated those “Dank Memes” or overdone ideas, beliefs and patterns of behavior.
So, when will the crow become euphoric? And will that encourage the other crows to visit in the future?
Those familiar with the Modern Family know my belief that when the members trade in synch, the moves in the market become more sustainable and powerful.
Over a week ago, I began to see that the Transportation Sector was becoming not necessarily euphoric, but certainly an optimistic crow.
IYT is now starting to show signs of euphoria, ticking to new highs without any substantial infrastructure policy changes in the current administration.
The belief, delusional or not, supersedes the reality. Now, we look for the trickle effect.
The Russell 2000 or Granddad, trading in a channel range between 135 and 143 must clear over the channel top.
