“Despite extreme valuations, investors’ fear of missing out is looking increasingly desperate,” says John Hussman in a May 1 report concerning the stock market’s recent tendency to move higher with lurching gaps on the opening bell. Although gaps are fairly common for individual stocks and not especially bearish, when they involve the overall market, notes Hussman, “they tend to have far more hostile outcomes, particularly when they are associated with record highs, rich valuations, lopsided bullish sentiment, and deterioration in the uniformity of market internals.” Sound familiar? For the full, meticulously detailed report, published by Hussman Funds as a Weekly Market Comment, click here.
Bull Market Showing Its Age with Exhaustion Gaps?
- May 3, 2017, 5:43 am
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May 3, 2017, 12:16 am
I am not certain, but I think as more and more trading is done by computer programs, or off the exchanges totally, we will continue to experience increasingly strange market conditions.
Perhaps the programs share so many of the same triggers, they are in a “Mexican Standoff” situation most of the time. I am sure they all have access to the order books at the CME, NYSE, CBOE, etc. and work that into moving averages etc. to trigger buy/sell action.
It is all NHI, all the time!
NHI = No Humans Involved
‘Weekly data gaps’ as towards last weeks gap are particularity unusual, they have only taken place a handful of times in the last 50 years.
They suggest a ‘rush’ to own creating the short term data to split over a weekend event of building positive sentiment.