Okay, sonny and girlie, what do you think is going to happen? These are exciting and epic times and even more so because few realize the historical significance of this inflection point. The US stock market is likely printing a multi-month and multi-year top currently while Wall Street analysts universally call for blue skies and rainbows for as far as the eye can see. Investors are buying stocks with reckless abandon salivating over more Fed and Congressional stimulus which will pump stocks higher as is the case for 11-1/2 years running. The wealthy dance with glee.
The bulls step over 3,000 American bodies per day dying of COVID-19 to buy stocks. The coronavirus pandemic is killing one American every 30 seconds but the stock market party is in full swing with the SPX printing a new all-time high at 3699 and NYA at 14417. The Dow prints a new all-time record high at 30218 and Nasdaq Composite 12464. The bulls are soaking up the sun. Life is great as long as you ignore those unsightly covid bodies. Whheheeee! Whooopie! Live for today and don't worry about tomorrow! Observing humanity is a hoot.
The NYHL New Highs-New Lows chart identifies key stock market inflection points due to the extreme trading behavior in one direction or another. The red circles show where the new highs that day were out of control, to the stratosphere, even the lowliest pieces of trash companies were snatched up faster than the last cashew at the Christmas party. This euphoric bullishness is when the top occurs.
Conversely, the green circles show uber low NYHL readings that verify the panic and fear in markets. Oh woe is me, everything is sold, there is despair, and thinking that stocks will never recover ever again, we are now getting sucked down the rabbit hole. Of course, that is when the bottom occurs.
The upside orgy is out of control. The neighbors called the police, and the sirens are heard in the distance. The cops will arrive any minute telling everyone to stop drinking that Fed whiskey and BOJ sake, it will make you crazy in the head, put your clothes on, and go home. The ECB heroin and PBOC crack that is going around the last few years (central bank money-printing) will destroy people's lives in the future (your finances and standard of living).
Are you ready for a flash crash or market crash event? The price action and market conditions have not been set up this perfectly for that type of wild event in many years. Time will tell if something crazy happens, perhaps a Black Monday may be on tap? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Sunday, 12/6/20: Bloomberg analyst Gina Martin Adams says the S&P 500 is not even at moderately-overbot conditions. She is in the buy, buy, buy camp. GS analyst Kostin called for SPX 3700 this year and Friday it was only 80 cents away. Do you think the uber bulls are correct or do you think the stock market is going to receive a comeuppance?
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