A 362 point drubbing yesterday for the Dow Jones Industrials capped a two day decline for the market. Two constructive days of weakness for the market just after touching fresh record highs, que the top calls.
Of course we've covered the top calls ad nauseam:
and while we are another day closer to the inevitable market crash, that crash may come tomorrow or in 2030.
One thing we know for certain is that the endless calls for a top in this market, as well as the crash calls, will continue as this market reaches new highs.
And as this market has marched its way to countless new records, the same '$AMZN is a bubble talk at $250' is here with $AMZN at $1450. Bubble or not, being long this market has been the right move. Those calling for a market crash, spreading the endless bearish banter for years on end... well think about it for a second. Any uber bear is not participating in this rally. Those expecting an imminent crash every session the last 8 years aren't committing their capital to the stock market. The one's calling this market overvalued when $AMZN was $250, aren't locking in gains on a market they have never been long to begin with. Instead their lone bastion is their negative bias. That same failed thesis they've been touting the last 8 years, perhaps today it will finally come to fruition.
And yet the massive move we've seen... the one that has been fueled by 'reckless animal spirits'.... it's getting CONFIRMED right before our very eyes.
Perhaps this tremendous earnings season will finally market the top for this market. Perhaps growth will slow and prices will stagnate or even.... go lower? But today... the upside for this market is being confirmed with every earnings report.
Look no further than Boeing this morning. The stock has rocketed to record highs. They have nearly HALF A TRILLION DOLLARS in order backlogs! HALF A TRILLION!
$BA is at $360 for the first time this morning
$NFLX rocketed days before its earnings announcement. After its earnings report the stock moved even higher. And is still rallying.
The post earnings move for $NFLX is telling you the stock was not overvalued rather it was underpriced heading into the report!
Imagine that. Stocks at record highs still having more value after they report earnings. What does that tell you?
Whether or not you like this market, or like what the Central Banks have done, earnings reports are confirming the nearly daily record highs we are seeing in the stock market.
At some point, prices will start to stagnate and perhaps even roll over. At that point the market, who is far smarter than everyone you know combined, will be telling us that perhaps earnings are not going to be as good as everyone expects. And if prices continue to fall, even after the earnings reports, we can deduce that earnings for the next quarter are probably shrinking as well. Who knows when that time will come.
For now the price action is getting confirmed with earnings. You can even say the price action is undershooting earnings, with the recent $BA and $NFLX moves,
We have $MSFT $FB $AMZN and $AAPL coming up to see if their recent moves will get confirmed. I have a feeling they will.