This is easily the nuttiest market I’ve ever seen. But my tenure in this business only goes back to 1986. Yes, I was just beyond my rookie year on Wall Street, when this happened. That’s the year 1987 through the October 19 crash. However the trouble began in late August. After a sharp rally during late July and into August. And after a year that started quickly, pulled back, traded in a volatile range for a while.
What broke it was not “fundamentals.” It was market mechanics and function. They were not just off a bit. They were downright dangerous. Just as they are now.
Bottom line: forget the narratives and the fundamentals. This is a traders’s market, periods. Asset flows and faith. That’s it.
Which is why I think EVERY serious investor needs to understand this chart below, and heed its warning…