It’s dawned on me after spending few minutes on twitter this morning that many people are ready to call an absolute top. The tweets you can imagine are all the same, “Did you see barons this week?”, “My local paper with dow 14k headline! retail about to get creamed!”. While I find it interesting like anyone else, I don’t think it’s THAT easy. I think people are sometimes forgetting how far euphoria / fear can go. Imagine this scenario in the reverse, as the market was tanking in 2008 saying, “This has to be the bottom!” only for the market to continue going lower.
I see all the same sentiment data everyone else is seeing and it’s at record levels for sure. This type of upside excess should push to you lock in profits, but I would not try to bet against this going short because you have no idea how much longer this could go on. People are still skeptical and this screenshot of a comments section to Bloomberg Facebook is another great example.
Imagine a scenario where we pause for a bit, but then the market continues to go higher? Wouldn’t that frustate everyone and defy all logic?