Investors are so scared. They don't want to get burned. They've missed out on one of the greatest stock market rallies in history. They think it's too late for them to be buying stocks.
Here's the thing. I think we've barely even gotten started. This is the beginning, not the end.
Last week the Volatility Index saw its highest reading ever with the S&P500 within 5% of new all-time highs.
When people buy insurance at a faster rate than ever before, does that normally happen just before everyone is thankful they had that insurance? Or does that traditionally occur just after the disaster when it's not necessary anymore?
How funny is it that Saturday Night Live mentioned that the stock market is not working on 3 separate skits in the same episode last weekend?
The Percent of global markets trading above their 50-day average is faltering. It's dropped to 78% (83% for Developed Markets & 74% for Emerging Markets). Below 70% is a warning for the market, below 40% is usually bad news.
In case you missed it this week, our team just got a whole lot better. Willie Delwiche is officially part of the Allstarcharts Team. We couldn't be more excited to have someone with his experience adding to the conversations we're already having every day.
To no surprise to any of us, Willie is already hitting the ground running with some excellent perspective on current market sentiment, valuations and breadth.
Here's what he had to say today,
Stocks are historically expensive, but this is offset by ample liquidity being provided via monetary policy (and to a lesser extent the hope of additional fiscal stimulus). Investor sentiment is heavily tilted toward optimism and complacency. This becomes a more acute concern when market momentum is faltering and/or rally participation is narrowing. That is not currently the case, as an increasing number of markets have broken out of bear markets that stretch back to 2018 or earlier"
