Riding The Type 3 Mega Market Melt Up Train

The decade long bull market run, aside from making everyone ridiculously rich, has opened up a new array of competencies. The proliferation of ETFs, for instance, has precipitated a heyday for the ETF Analyst. So, too, blind faith in data has prompted the rise of Psychic Quants… who see the future by modeling the past.

For the big financial outfits, optimizing systematic – preprogrammed – delta hedges is an essential aptitude of the 21st century. Our guess is that many of today’s high flyers will crash and burn during the next bear market. But what do we know?

As far as we can tell, the stock market, circa November 2019, is an absolute fantasy. The Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq have little connection to the underlying economy. Rain or shine, they go up.

Market watchers, eager to explain the fantasy, employ creative nomenclature as they attempt to classify the state of the stock market with discerning acumen. Is it a bubble? Is it a melt-up? If it’s a melt-up, what type and gradation is it?

For example, Brian Sozzi, with Yahoo Finance, says the stock market isn’t a bubble; we’re merely experiencing a mini-market melt-up ahead of the holidays. Savita Subramanian, the chief equity strategist with Bank of America, has a slightly different take. She thinks we’re facing a beta-driven melt up to close out the year.

Do you know the difference between a mini-market melt-up and a beta-driven melt-up? Neither do we…

Thus, for fun and for free, we attempt to deduce and classify the state of the stock market – both type and gradation – on your behalf. We want to know precisely where things stand.

New Records

Yesterday [Thursday] the DJIA and S&P 500 both closed at all-time highs. President Trump, an ardent market hobbyist, was quick to celebrate the new records, tweeting:

“Stock Market up big today.A New Record. Enjoy!”

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