We have come a long way since the panic in March. At one point on March 12th, the $VIX hit 90 and the Stocktwits Social $VIX was 2.5 (2.5 bullish messages to bearish messages). Here is my blog post from that day.
That panic led to a bottom in prices over the next week and a rally that has been epic in nature.
Yesterday, the indexes all closed at or near all-time highs, the $VIX closed down at 22 and the Stocktwits Social $VIX was THIRTEEN (13). Thitrteen is the highest ratio I can remember in my 12 years looking at the data. Stocktwits users are giddy for good reason. Their IPO’s, SPAC’s, Chinese Electric Vehicle stocks, Semiconductor stocks, weed stocks and Crypto tokens rise every day. They don’t have time for FAANG anymore!
March was misery and November is giddy.
I am neither amused, or excited or worried… I am just in awe.
Ryan Detrick shared a chart of the small cap sector yesterday that showed it having its best month in history. Here it is:
Only February 2000 was as close to this good. What followed that spike was years of misery and poor returns.
I have no idea what lies on the other side of this incredible rally but I do know that anytime I say something the least bit optimistic on Twitter I get tweets yelling back ‘THE TOP’ at me.
Market bottoms, at least for me have, are much easier to spot than tops.
Like I said yesterday, this positive momentum is something I will keep riding, not trade against.
Most interesting is this chart of the $VIX that shows if the $VIX can close below 21, it will end one of the longest streaks above 21. What has followed from previous high streaks is a long bull market…
I can feel the FOMO in the air and in the tweets, but what if this is just the start of another bull market?
Have a great day.