The Market & The Moon
Fresh New All Time Highs
The Market & The Moon
The markets closed another week at record highs, with the S&P 500 up by 2.3%, the Nasdaq by 3%, and the Dow by 2%. Throughout this year, our weekly note has diligently monitored three correction criteria. Week after week, it has become increasingly evident that until all three criteria are active, it is unfavorable to position against the market, despite stretched sentiment and positioning.
Before progressing into the correction criteria assessment, I want to share two charts that caught my attention:
The first chart, courtesy of Sentimentrader, depicts the small speculator index at the bottom. The annotation succinctly captures the essence of the chart— "small speculators are all in." This mirrors my observation last week regarding fund managers being fully invested based on the NAAIM index. The alignment between market participants, both large and small, underscores the pervasive euphoria across the market.
The second chart, from Bank of America Global Research, highlights the Technology leadership versus the S&P 500, reaching levels surpassing those seen before the Great Financial Crisis. This serves as an intriguing backdrop to maintain awareness as sentiment and positioning continue to stretch.
This week's note will once again provide updates on the primary correction criteria, along with updates within the three categories of trade ideas: Small Cap US Equities, Outside of US Equities, and The Gold Trade. Expect this note to be chart-heavy and light on text.
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