When you do this as long as I have – – Slope is, after all, nearly 18 years old – – you tend to get a sense as to extremes in psychology. A lot of “signals” have nothing to do with charts. For example, when things have been going fantastic for the bears, then subscriptions here tend to soar, I get a lot of really friendly emails, and, to be honest, I become quite a blowhard.
When things suck for the bears (like, umm, right about NOW) it’s just the opposite. In particular, more and more people start rubbing my face into the market’s ascent and talking about how such-and-such has declared a New Bull Market and this-or-that indicator says we’re going to 7,000 on the S&P in two weeks, and it’s been right every one of its past 587 signals.
I don’t have to go back far at all to show some examples of bullish extreme arrogance. I have blotted out the names, since my mission here isn’t to shame any individual. But let’s take this item from May 27th of last year, which states that the lows were in “for a long time” and that ‘Crypto and a lot of SPAC….has been burned down.” He projected a level of 5,500 on the S&P 500 (Spoiler alert: didn’t happen).
I’ve put an arrow where the comment was left. I can see his rationale for thinking the market had bottomed, because it had stabilized for weeks. However, the bottom was FAR from happening in crypto (keep in mind, when this comment was left, Samuel Bankman-Fried was considered one of the greatest businessmen in the world and was worth $28 billion) and SPACs had much, much farther to fall. Bottom line is that these taunting comment was stone cold wrong.
Let’s take a more recent example. This fellow stated that market would “continue up until after the elections.” I immediately – – and rather presciently – – declared that I would Star his comment for later reference (like, ummm, right now).
Again, the arrow marks the timestamp of the comment. He was right for about 12 more trading hours, and then we commenced the most sensational downturn of the year. So, again…….wrong, wrong, wrong.
Thus, as we find ourselves surrounded by sneering, smirking, taunting bulls, keep the truth above in mind. On one of my screens, I have the motto “VIX at 20, use the money. VIX 33, time to flee.” I guess we should amend that with “VIX at 18, puts are keen.” Or something like that.
