So far a repeat of yesterday. I'm thinking we'll see the same pattern for today. Slow grinder for most of the session with a push/drift higher into the Close. Generally, the probability of a sell is very slim on a day like today.
When we do eventually get a pullback (lasting at least a few weeks) it'll be an obvious layup setup for a measured move. IMO SPX will drive to ~3800 by midsummer then consolidate into the election.
Yes. And it will be a move that people will be tripping over themselves to buy into. Btfd. And then after a few days, it'll happen again. Those with dry powder will buy more. Then the real trap-door will open. Just like Dec 2018, except this time way way worse. There's no easy money. But for now its up I guess. A lot of folks are going to experience something they've never seen before. Builds character. Been there, lived it.
Like I've said a few times to various people now: "I hope you're right." I'm just curious what the specific trigger will be? I believe the previous financial crisis was triggered by the bankruptcy of Lehman Brothers. Not chart patterns. Not markets being overbought or too high. I know a guy who got started in the stock market just around 2010 and which have literally become rich in this bull market. Every day and every week his account is getting fatter and he's literally done nothing. In fact - I know several of these. A few of them got started only a few years ago. They all say that if the market should drop 10-20 % they will leverage a loan to the hilt and go all in with new money in the stock market. It's true that all of these guys have never experienced anything other than the market going up. I do remember reading some panicky threads on another forum (not trading related) when the markets were going down in the fall of 2018.
You touched on a point that could well explain the exuberance, 11 years is a long time, long enough to place half the traders in the category that have never experienced a bear market so they are taking on risk without knowing it. Indeed anyone that entered the game after 2008 probably thinks its an easy game... just buy the dip and bank the profits in a few days, add the social media effect to that and you got a snowballing number of young investors that buy every dip without thought nor regard to the cause of the dip. Dangerous times, dangerous levels me thinks.
There are many possible triggers. We already have a Fed governor (Kaplan) openly acknowledging that the balance sheet is driving stocks, and saying they need to step back and double-down on unwinding. There's also a very real risk that inflation breaks out - with 3.5% unemployment, large deficits at the top of the cycle, and an ultra-accomodative Fed, it wouldn't be at all surprising. None of these are happening now and for the moment I'm very bullish, and if you put a gun to my head I'd say we have at least 2-3 years left in this bull, but conditions can change on a dime. Many commodities look to have entered uptrends while the USDX seems to be topping out - these might be the first warning signs of what's coming in the future. One thing's for sure, we've entered a new phase where greed and FOMO, rather than fear of loss, is the dominant psych in the market.