🍔Good Things Come in Twos

Climbing the wall of worry

The bears battled hard this week but SPX still remained well supported. It is currently in a two-week consolidation where bad news cannot push it down. And there was certainly no shortage of bad news this week. We remain on our buy signal from April 13 when we started buying near the bottom.

There is a lot of risk out there right now. Trade tensions are flaring up again, and recession appears to be just around the corner. Is now the time to sell or hold? We use market timing to answer that question. Paid subscribers get our market timing calls in real time — as verifiable in the library.

Wall of worry 2.0

In markets, a “wall of worry” is when there are countless and persistent reasons to be bearish. For instance, right now we have: tariff uncertainty, geopolitics, recession, inflation, rising interest rates, government deficits, high stock valuations, AI capex overbuild, speculative retail buying, hedge funds shorting, etc. You can come up with an endless list of worries to keep you from investing.

Despite widespread concerns, bull markets tend to “climb” the wall of worry and keep rising. It is a very common psychological trap that smart money often fall victim to. Ironically, the more research they do, the more reasons they find to be bearish.

We protect against this by following price action. Let the market tell you you’re wrong. If the market is ignoring the negative headlines and still going up, you’re probably wrong to be bearish. Find out what the new narrative is, and adjust your priors. The worst thing you can do is fight the trend!

How does that apply to the current trend? Right now investors want the market to fall…

The rest of this article is for premium members. Today’s post covers:

• Trade war is not over

• Recession around the corner?

• AI revival

• Retail mania