email excerpt today from one of the most reliable Fades, when he is most bullish or most bearish:
While it is true that some stocks have gone up, and others have gone up a lot in recent months, the biggest stocks of them all have not.
Google, Apple, Microsoft and Amazon are the 4 biggest companies in the world. Throw in fellow behemoths Facebook and Alibaba, and now we’re pushing $8 Trillion in market cap. That’s big time money.
And you know what those stocks have done since September 2nd?
Nothing.
Most of them are even down a bunch.
That’s a lot of market cap. And you can throw in Berkshire Hathaway, Visa, Walmart and Nvidia, which have also done nothing, and we can keep playing this game. But I think you get my point.
It wasn’t too long ago that the narrative was, it's only 5 stocks driving this market higher. That was hilarious then, and even more hilarious now.
So what does this mean? So what JC???
Well, for me, I think this market is going a lot higher. Like not a little bit higher, but much much higher.
So….
If the S&P500 is going to 4,500 and the Dow to 38,000, and we’re going to really do this, then my bet is not going to be that we get there without the participation of these stocks above. If we’re gonna go, these stocks are gonna go.
And you know what, they’ve done absolutely nothing for a quarter and half. Nothing.
So it’s not like they’re extended and need to correct and digest some gains.
They’ve been doing that already. And they've been doing it for a while.
You want to know what else? The resolutions in these Mega-caps are going to be information. Because sure, I think stocks and the indexes go a lot higher. And yes, I think these stocks all resolve to the upside and begin new legs higher. I think all of that.
But the market doesn’t care what I think. Sorry to disappoint you (I was disappointed too when I found out, trust me).
The market is going to do what it wants. And if these mega-caps DON’T resolve higher, and in fact, resolve these consolidations lower, then that’s information. It most likely means that the little guys are going to come off as well. It becomes a liquidity thing. |
