There’s only one subtle joke in the film Anchorman and it involves the fact that the San Diego news team’s weather man has a sub-100 IQ. In a city where “72 and sunny” is the forecast 365 days a year, even Brick Tamland has no problem reliably delivering this news to the viewers.
In the chart below, via my firm‘s Research Director Michael Batnick, you’ll see the S&P 500 ETF overlaying a chart indicating new all time high closes (in red). The monotony of fresh records has been brutal for the short and the sidelined – wide red stripes indicate entire weeks full of all time highs at the closing bell. It’s become an everyday occurrence. Brick could take over the business news without a problem.
What’s happening here is classic herding behavior and the market isn’t letting you back in if you’ve sold.
The danger here is clear – mass complacency and a moment at which anyone who could buy, would buy or needed to buy throws everything they have at the tape just to end the pain.
My friend Jon Krinsky, technical analyst at MKM Partners, has been keeping track of a very specific dataset that I find to be fascinating. He’s looking at the current streak of days the S&P 500 has spent above its 5-day moving average. As of yesterday’s close, we’re at 28 straight days! Jon notes that this is the longest such streak in the history of the US stock market, surpassing the prior record of 27 days from 1928 – another moment during which there was universal agreement that you had to be in.
Jon’s table below:
The market has been a wall for the dip-buyers. Impenetrable. They cannot get in unless they’re willing to pay the all-time high. It’s a high barrier of entry psychologically, especially if they’d been counseling caution all this time to their clients. The about-face could be career-wrecking, especially if it happens at a major top.
I’m a New York City-based financial advisor at Ritholtz Wealth Management LLC. I help people invest and manage portfolios for them. For disclosure information please see here.
Get a Full Investor Curriculum: Join The Book List
Every month you'll receive 3-4 book suggestions--chosen by hand from more than 1,000 books. You'll also receive an extensive curriculum (books, articles, papers, videos) in PDF form right away.
The Brutal Monotony of All Time Highs
http://t.co/h6M7n1jGvG http://t.co/gu5ZZwJ45U
Like working as a weatherman in California, there’s a brutal monotony in reporting all-time highs… @RefomredBroker http://t.co/T7pb4EAxBw
RT @asibiza1: Like working as a weatherman in California, there’s a brutal monotony in reporting all-time highs… @RefomredBroker http://t…
RT @ReformedBroker: The S&P 500 has spent 28 consecutive days above its 5-day moving average, a new all-time record.
http://t.co/7aqUo85H…
RT @ReformedBroker: The S&P 500 has spent 28 consecutive days above its 5-day moving average, a new all-time record.
http://t.co/7aqUo85H…
The Brutal Monotony of All Time Highs http://t.co/XqjP5iGmwe
RT @ReformedBroker: The Brutal Monotony of All Time Highs http://t.co/RgneLZsE6Q
The Brutal Monotony of All Time Highs by @ReformedBroker http://t.co/iRhKcOK9X5
“The Monotony of Highs by @ReformedBroker http://t.co/s2brc3KcNG” surprising the markets been so good after being so bad in 08? Not really
The Brutal Monotony of All Time Highs http://t.co/kXJ0gh9wYp
[…] The brutal monotony of all-time highs – Reformed Broker […]
[…] When new market highs are boring. (The Reformed Broker) […]
[…] The brutal monotony of all-time highs – Reformed Broker […]
… [Trackback]
[…] Read More on that Topic: thereformedbroker.com/2014/11/26/the-brutal-monotony-of-all-time-highs/ […]
… [Trackback]
[…] Find More here to that Topic: thereformedbroker.com/2014/11/26/the-brutal-monotony-of-all-time-highs/ […]