Prep for what I believe will be a massive second wave
of inflation by targeting $1,000 each Monday!
Despite all the uncertainties swirling around the market — geopolitical tensions, inflation, an upcoming election and elevated valuations — there’s one thing that keeps pulling investors back in…
The fear of missing out, or FOMO in trading circles.
The market has shrugged off risk after risk, and instead of pulling back like many might have expected, it’s continued its steady march higher, pulling in more buyers who are afraid to be left behind.
In 2024 alone (through Monday’s close), we’ve notched 46 all-time highs on the S&P 500 (SPY).
There’s a growing narrative that this market just refuses to stop, regardless of what’s happening around it. From Middle East conflicts to rising oil prices and even the occasional inflation spike — none of these factors seem to phase investors who are chasing returns.
The result? A melt-up that feels a lot like the final innings of a bull market. But here’s the catch…
This market doesn’t seem interested in reality right now. It’s pricing in every possible positive, while pushing the negatives aside.
Earnings, while not blowing the roof off, are holding up well enough. The Fed has pivoted to a more dovish stance, and with the ongoing cuts in the near future, it looks like easy money is here to stay — at least for now.
This kind of environment creates a dangerous dynamic.
When stocks keep grinding higher with low volatility, investors start to believe the market will never go down. They see a couple of down days, but nothing sticks. It almost feels like the market’s playing a trick — lulling everyone into a sense of complacency while it climbs higher and higher.
But here’s the thing about FOMO…
Iit works until it doesn’t. Eventually, there will be a reality check, and when that happens, it could get ugly.
Valuations are already stretched beyond historical norms — up to 66% overvalued by some metrics like price-to-earnings ratios. We’ve seen this before, back in 2000 and 2008, when irrational exuberance drove markets to unsustainable levels, only for everything to come crashing down.
I’m not saying we’re going to crash tomorrow or even next month. But history has a funny way of repeating itself when investors get too comfortable.
The real risk is that as more people pile into this market, driven by FOMO, they ignore the warning signs until it’s too late. The more extended we get from key levels like the 200-day moving average, the more violent the correction could be when it finally arrives.
For now, the path of least resistance is still to the upside, and there’s no reason to fight it. But we have to be aware of how far we’ve come — and how quickly things could change.
FOMO might be driving this market higher, but when it reverses, it’s not going to be pretty.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
What you’re looking at is part of the reason why I’ve been so bullish on Nvidia.
And with tech stocks ripping and Nvidia leading the pack as always, I believe this is the perfect time to to bring in one of the best Nvidia traders I know to show you what could be the best way to trade the stock this week
He calls it the Nvidia Elite trade.
Now, I don’t want to spill all the beans here but…
The Nvidia Elite trade allows us to tap into fast-paced Nvidia options… for pennies on the dollar
The best part?
When these setups work out… they’ve shown the power to pay double, even triple… time and time again.
We cannot promise future returns or against losses but if you want a front-row view on how the Nvidia Elite trade works at 1 p.m. ET on Thursday, Oct. 17…
How we’re using it to trade what could be the next Nvidia breakout…
And more importantly, the newest Nvidia entry and price target from the mouth of one of the best Nvidia traders I know…
The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. The trades expressed are from live trades issued between 6/02/2024 and 10/11/2024. The result is a 80% win rate over a 5 day average hold period.
