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When Will Complacency Finally Catch Up With This Market?

By Jani ZiedinsStock MarketsJun 25, 2021 01:26AM ET
www.investing.com/analysis/when-will-complacency-finally-catch-up-with-this-market-200588166
When Will Complacency Finally Catch Up With This Market?
By Jani Ziedins   |  Jun 25, 2021 01:26AM ET
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The S&P 500 popped to record levels at the open and it held those gains through the close.

Amazon Inc Daily Chart
Amazon Inc Daily Chart

Weekly unemployment claims are stabilizing at reasonable levels and investors are cheering moderation. Too high signals economic weakness and too low suggests this wave of inflation is only just getting started. Holding between these two extremes is the “just right” investors were looking for

The market’s half-full sentiment keeps getting even fuller. That’s been the theme of the year and it doesn’t look like it will change anytime soon. Owners are confidently holding for higher prices and are shrugging off all of the reasons for stocks to go lower. When owners don’t care about the negatives, supply remains tight and prices are stubbornly buoyant.

No doubt something will come along and knock us down, but until that happens, all lights are green. If this market was as fragile and vulnerable as the bears claim, it would have collapsed by now. Things will get more interesting this fall when institutional investors return from summer vacation and start positioning for year-end. But that is still months away and until then, we should expect more of the same.

Cynics claim this market is fixed/rigged/etc, but if they know that’s the case, shouldn’t they be riding along and making money instead of complaining about it? There is only one way to trade this market and that is sticking with what has been working.

The index is trading well but someone forgot to tell Amazon (NASDAQ:AMZN). But a one off day doesn’t mean we should abandon a stock that has been working well for months. On the positive side, Netflix (NASDAQ:NFLX) seems to be finding its footing. While this could have slipped under recent lows, that didn’t happen and it looks like dip buyers are finally warming up to these discounts. This remains a buy above $500.

When Will Complacency Finally Catch Up With This Market?
 

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When Will Complacency Finally Catch Up With This Market?

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Comments (2)
Collins Collins
Collins Collins Jun 25, 2021 3:26AM ET
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If the market isn’t fragile and vulnerable, the Fed should quit $120 billion (per month) bond-buying. Watch prices fall like a park of cards when that happens and rates rise
Jeffrey Armstrong
Jeffrey Armstrong Jun 25, 2021 2:04AM ET
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Everything is just great. Why the need for the Fed to continue their printing then? Why the infrastructure money? Because this market is being propped up by the Fed/Govt printing.
 
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