A question everyone wants, or already thinks they have, the answer to. Where is the market headed? Today we hit fresh record levels and pulled back.
Back in 1986, when celebrity nude photographs came in 16 pixels of black and white, a game called Bubble Bobble was released.
The game was a true hit and if you ever bore of slicing up fruit, or lining up fake candy all day long on your smart phone, I'm sure you can find a version of it online to play. Some 20+ years later the game still rings a bell in this old head of mine and it is a classic... we were just as good at making mind dumbing video games back then as we are today....... also the Bubble Theme seamlessly melds the stock market into focus. What better way to draw in some bearish eyes. "BUBBLE" forget the Bobble! Brilliant! I knew there was a reason I was writing about it.
This last pullback was really as typical as they come. We had a geopolitical event that caused the VIX to jump significantly. And what happened next, is that everyone started calling for a big 10-20% correction. Then, cooler heads prevailed, and institutions came roaring back and bought this market head over heals. Over the last few years, there has not been one geopolitical event that has caused a correction of more than 5%. In addition, the technical picture was so clear. We had an overbought reading on the RSI, and the pullback alleviated that. We went from a 70 RSI on the SPY to a 30 RSI. But, what is really making this past pullback so typical?