Even before the GOOGL/AMD earnings came out Tuesday night, the tide had turned against the bears fiercely in recent days. In the span of a single week, the world went from we’re-all-going-to-die to happy-days-are-here-again. The icing on the cake, for the bulls, was the GOOGL news, an important component of which was the high-tech breakthrough of announcing a 20-for-1 stock split.
The bulk of the bullish counter-strike was on Friday and Monday, but, broadly speaking, the bulls grabbed the baton last Monday and have been repairing the market ever since. Mega-mega-caps like AAPL and GOOGL didn’t even get a scratch from the downturn, and one line after another has been shunted aside.
Since I’m very much in a WW2 frame of mind these days, I would like to offer an important analogy. In the dark days of May 1940, the only barrier to world domination from the Germans was the island nation of Britain and, thank God, Winston Churchill. And aside from the resolve, the RAF, the radar, there was one asset above all others that was crucial to their survival, and it was the English Channel.
The mere existence of that strip of water was what gave them a fighting chance. And I would submit to you that our own English Channel did not even exist on December 1, 2021. Over the course of December and January, that channel was constructed (and, as chartists, let me be clear that this is not a channel in the drawn object sense, but in the metaphorical one).
What I am speaking of is this topping pattern which is present on just about every meaningful index (this one in particular is the NQ, which I want to emphasize DOES incorporate all the positivity from GOOGL and AMD already). Think this is about over? I sure do.
I would go on to say how obvious the peak was in bearishness, since the VIX has an exquisitely clean pattern in recent months. And, as you can see from present conditions, just about all the air has been let out of that balloon.
I realize more than anyone how discouraging the past week has been for anyone who reasoned that Good Sense and Logic had finally returned, only to witness that, nope, now in its 13th year, this madness is continuing unabated.
But take a good hard look at the futures on the /RTY and try to tell yourself that this is anything but an historical reversal of fortune.
Let us therefore brace ourselves to our duties, and so bear ourselves that, if the Ursine Empire and its Commonwealth last for a thousand years, men will still say, ‘This was their finest hour.’
