While everyone is dissecting all the reasons the markets have ‘topped’…and to be sure there are some doozies, I continue to focus on things I can control…like managing MY OWN Positions.
The same people that talk about the lack of volatility all day are the same people that are looking at the S&P 500 market cap weighted stocks. The SEC, the marketers and bankers have figured out how to pile everyone into vanilla, fully invested, market cap weighted, low fee ETF’s. They know you were scared to death by volatility in 2000 and 2008 so they created a new plan for your money. I have no idea what happens to the markets when everyone finally hits the sell button at the same time, but I can’t imagine it will be pretty. The volatility is massively mispriced in this area of markets.
If you want to see/experience real volatility …invest in 30 startups, buy some Bitcoin and Ethereum, go to Greece without cash or a bank card, flick Erdogan’s ear. There is a ton of volatility out there that remains fairly priced.
What seems to be happening at the moment is money rotating. Tech stocks are selling off a bit, but banks are strong again, IPO’s are happening and the crypto market continues to surprise 90 percent of the Twitterati.
That said, here are a few signs ‘we might have seen the top’:
I have noticed personally from looking at Stocktwits data that we have 7-1 bullish ratio of BUY tags. I remember when 4-1 got me nervous. Stocktwits has skewed bullish since we started in late 2008. I will note that bullishness on the S&P index itself has dropped significantly from a high of 70 percent a few weeks ago to 50 percent.
I have learned how to read a lot of stories, research and opinions about stocks and markets and let it go in one ear and out the other. Most people can’t. They over trade.
I doubt this boom has ended.
The iPhone is just 10 years old today.
Google was blitzed with EU fines, but the penalty was ONE percent of it’s cash.
Retail sucks, but $LULU can still sell $68 bra’s.
The bankers are up to no good and they have a lot of cash and fresh leeway to operate under negligent Trump.
I can bet on two North Koreans playing Pong watching Twitch using tokens I bought in an ICO sale.
Hope this helps.
Also published on Medium.