Even with all the insanity out there right now the bulls it seems haven’t completely capitulated yet. Perhaps they shouldn’t, or perhaps they are delusional and they will find destruction. Or perhaps the bulls will provide just enough hope in the market to keep things from going into complete meltdown. A safety valve. Or maybe they are on the edge of giving up.
I have no idea. That’s what makes a market.
But The Reformed Broker has something to say about current goings on, and I think it’s pretty good.
(From The Reformed Broker)
By this summer, it became apparent to anyone looking at internals or international stocks that this period was drawing to a close and the game was changing. The divergences had piled up and the new highs list had been gnawed down to a nub. The S&P 500’s best 50 stocks drove the price indices higher, even while, one by one, every other stock succumbed. We spent the last few weeks on borrowed time but no one wanted to admit it. Even as rallies rolled over and breakouts became fakeouts in the hottest individual names (GoPro! Tesla! Mobileye!), there was a hesitation to acknowledge it. A difficulty saying goodbye.
And who can blame us? Why would you want to believe you couldn’t have Christmas and the Fourth of July every day, forever? It was a tantalizing prospect and it began to feel possible – even plausible!
But now it’s over.