Stocks looking parabolic

I mentioned this the other day. Analysts are racing to raise price targets 50-100 points higher than their original target in order to save face and keep up with this parabolic rise in stocks. Two things usually happen:
1) stocks violently retreat after a “ market melt up”.
2) stocks just consolidate and a bunch of stock splits are announced.

 

Stock splits?? Those are so early 2000s

 

Saw a thingy about a player in the Chinese market... basically said, "no worries... chase the rocket up and you can still get out before it crashes back".

Ever heard that before?

 

That's how you make real money in the market. With a strong Bias one way and sticking to it and hoping it gets hit.

 

When i said “ stock splits” i also had a flash back of the year 2000.

 

A sharp drop is a real possibility given the Fed has slammed on the brakes, and is now draining liquidity from the market.

Of course once the drop occurs, they'll have to rush right back in with YCC and ETF purchases.

 

If companies are selling less product while their stock prices are exploding higher, imploding lower will be next.

 

Doubt the Fed has "slammed on the brakes" at this time.

However the mentality of "ride the rocket" includes "aggressively buying all dips... giving the benefit of the doubt to the long side". That works until it doesn't. The best market trap is to have a BIG & FAST reversal... where the players foam at the mouth to "buy the dip gift"... except one of them is wrong to buy/ride-out/average down.

But let's say for the sake of argument... the Fed is actually "scaling back"... and if doing so meaningfully, the markets could take wind of it all at some point and reverse down. Unfortunately could occur in a cryptic way... that is, ignore the scaling back for a while so that the players think, "it's no big deal"... only to later conclude is really IS a big deal and have large, violent reaction to the downside. That's the trap of "always BTFD".

 

This parabolic rise in stock prices can be maintained forever so long as GDP increases parabolically.

 

GDP increases parabolically ...you would think these free trillions would have catapulted GDP to say 5%-6% and 7% but they can't even give enough free trillions to get gdp to 2%