Euphoria Vibes
The S&P 500 has embarked on an impressive performance streak, matching a record dating back to 1972, with 14 out of the last 15 weeks closing higher. Over this period, the index has surged by 22%. Despite this remarkable ascent, echoes of caution from my notes in July and August of last year resurface— 'don’t get lost in the euphoria.'
Euphoria, while exhilarating, tends to obscure rational judgment, particularly in the late stages of a bull run. The CNN Fear & Greed Index has consistently signaled elevated levels of greed in the market for nearly two months now.
As euphoria grips the market, headlines like 'Nvidia is now worth as much as the whole Chinese stock market' abound— a trend that warrants further discussion later in this week's note.
In this week's letter, I'll provide updates on the three criteria being monitored to assess the likelihood of an impending correction in the S&P 500. Additionally, I'll review the progress of the three trade ideas shared in January, and introduce two new trade ideas that I've started to position for.