The Thing About the Old Days

In the old days most market players would be more worried, in a tape like this, of the bottom falling out from an otherwise orderly decline up to this point. The concern would be that the market is still complacent regarding the myriad of risks both out of Iran as well as from the domestic economy (with tons of overlap, to boot). 

But even with AI memory stars like MU SNDK (and LRCX MRVL) getting pounding today we still have a fairly pedestrian, mixed market with the Dow green while the Nasdaq is mildly in the red as I write this. 

Indeed, I would surmise that many more traders are concerned about missing out ("FOMO" or Fear of Missing Out) on a seemingly inevitable bullish Trump headline which sticks. The issue there is that the President has been firing off nonstop Truth Social posts and various interview soundbites to such an extent that the market seems to finally be tuning him out, deducing that there may not, in fact, be an imminent deal between the U.S. and whomever may or may not currently be in charge of Iran. 

The old saying is that markets despise uncertainty. And there seems to be more than enough of that go around in this situation. However, years of nonstop bullish melt-ups and violent V-shaped rallies off any and all pullbacks has conditioned market players to not embrace the bear case and, instead, always look for the bulls to pull off the stunning bottom. 

Here, the risk is rising of an abrupt epiphany by the market that risk actually matters again. In other words, a return to the market of the old days. 

And if you are one of those who argue that the market has permanently changed, I can point you to countless examples over the last century to refute that very notion. Just this century, Ben Bernanke and Hank Paulsen were seen, prior to 2008, as market whisperers, meaning whenever they spoke the market always rallied. That changed to such an extent in 2008 that whenever Paulsen spoke the market would aggressively reverse lower, leading to traders cursing at their screens and even hurling objects at their trading floor televisions. 

It is true: The thing about the old days is that they are the old days. But markets have a way of coming full circle when they are least expected to do just that.