Good morning! The NASDAQ is at record highs pre-market, after closing yesterdays session at a new all time record high.
The S&P500 sits less than a half a percent away from a new all time record high this morning. And guess what?
The top is in! Yep. (cue sarcastic laugh)
You know what else?
You get a lot more likes and retweets on Twitter for calling a massive, all time top, than saying the stock market is going to continue to grind higher for the foreseeable future.
I also think this post will see a lot more eyes calling for a top. If I had titled this post... stock market to slowly grind to fresh record high after fresh record high, a lot of eyes would have probably turned somewhere else.
When the market was in a free fall in March, the talk wasn't about making new highs again this year, but how much further this market will fall.
When we bottomed in March the talk wasn't about making new record highs, it was how long until we re-test and possibly break those March lows. It was inevitable. The stock market always re-tests the lows... always... they said.....
And now we have those same folks who had not a clue new record highs were coming later this year saying the market has topped... wait but you said we were supposed to test the March lows first?
The folks telling you the market was going to roll over again after we bounced in March....
The mkt's been at current levels for 3 wks now, neither pushing higher nor rolling over. A pretty good standoff btw those who think the ricochet from 3/23 has more room to run, & those who think the rebound is overdone/basically out of gas. Our thinking: we roll over here. $SPX pic.twitter.com/eVu1ACOvQ8
— Carter Braxton Worth (@CarterBWorth) May 6, 2020
Now saying saying the market has topped... from levels they had never even dreamed it would reach just months prior...
With the $SPX fast approaching a well-defined former high (52-week & all-time high), the question is whether or not it can achieve meaningful gains between now & yearend. Not achieving meaningful gains means the market “gets stuck”, putting in a double top – that’s our hunch. pic.twitter.com/iZbCH1ytEx
— Carter Braxton Worth (@CarterBWorth) August 17, 2020
and listen I have nothing against Carter Braxton Worth. Perhaps he's spot on. I 100% appreciate this share on twitter. Maybe the top is in...
However I also like to question the top callers and bears, because if you thought the market had topped and/or was setting up for a big move lower... would you be long the stock market?
Would you be buying stocks if you thought the market was overvalued and/or will not go higher?
Clearly there is a big bias. Anyone calling for a market top or big market correction has no skin in the game. Zero.
I also will ask this....
After the strongest rally in history.. saying stocks are setting up for a fall?
Or saying the market is going to continue higher?
Which one gets more likes? More retweets on Twitter?
Some of the most widely followed stock market commentators on twitter have been bearish on the market since 2009. Every day they wake up expecting to see stock futures limit down. And when they aren't they go on Twitter, whine, bitch, and moan and then bash the FED until the closing bell. They wake up the next morning.. rinse repeat....
For those long term uber bears who have garnered a big following being wrong about the stock market nearly every day for 10 years, they always blame someone else for being wrong about the market. It's the FEDs fault!
Your chronic widely followed stock market bear: the Fed has lost its mind flooding the market with liquidity at the slightest hint of a recession. Here are 20 reasons why the market is going to crash tomorrow.
— UPBOptionMil (@UPBOptionMil) January 14, 2020
We may very well be near a top for the stock market. Perhaps this market needed to test the record highs before retesting the March 23rd lows....????
Anything is possible....
But clearly there has been one overriding theme the last 10+ years.....
And none more evident than the 2020 Pandemic.
Bad news = good for the stock market.
The proverbial wall of worry. I've been saying it for years. All those reasons the bears have been giving the last 10+ years on why the stock market is going to fall, has actually been why it has headed higher.
I mused in years past that the next recession would see stock prices head higher not lower.... and sure enough that is exactly what happened.
I don't think we've topped.
Why? Because we aren't close to where we need to be for the economy...
and the FED has no reason to take the foot off the gas pedal yet
$7 trillion+ and counting... not even thinking about raising interest rates for years to come... and zero concern about asset bubbles...... put all that data into the biggest computer and what do you think it will tell you this means for asset prices going forward?
— UPBOptionMil (@UPBOptionMil) June 10, 2020
Those bears since 2009 rooting for the destruction of the stock market have been wrong for a reason? Why? Well they've been looking at it all backwards.
As evidence by the Covid-19 Pandemic.... the stock market bears shouldn't be rooting for economic disaster to fulfill their market crash wet dreams. They should be rooting for excessive economic expansion. And until that comes... depsite what you see by those widely followed stock market bears, wrong about the stock market for 10+ years.... this market will not top.
Bonus chart... where I think the next stop is...