"US stocks just keep going up" is the most dangerous sentence in this market
Everyone's parroting this line now. Top thread on r/stocks weekend discussion: "No matter what happens, US stocks just keep going up." Cool. That's exactly what people said in February 2022 right before the S&P dropped 25%.
Look, I get why the narrative exists. We literally hit SPY 7000 during an active war blockade. Twelve green days in a row. Fear went from 12 to 27 and the market barely flinched. The Iran war barely dented us. Hormuz reopened and futures ripped 500. It feels bulletproof.
But that's the problem. When everyone agrees stocks only go up, that's when they stop going up. Not because of some cosmic justice thing - because positioning gets stretched.
Today's action tells the real story. $EFOI +211%, $ORIQW +121%, $FRMM +81%. That's not a healthy market grinding higher. That's speculative excess. Meanwhile $LZMH -84%, $FCHL -77%, $MSAIW -45% are getting absolutely destroyed on the other side. The gap between winners and losers is psychotic right now.
And Fear is still only at 27. The rally happened and retail is still scared. That means the people who missed it are about to FOMO in at the exact wrong time. Classic setup.
I'm not saying short everything and go to cash. I'm saying maybe pump the brakes on the "stocks only go up" victory lap when your top gainers are random microcaps tripling on no news.
Who else feels like we're setting up for a humbling moment or am I just being paranoid?