Are We Really Doing This Again?

The legendary football coach, Bill Parcells, once said, "Dumb players do dumb things. Smart players very seldom do dumb things."

And that brings to the current market, which strikes me as one doing dumb things, and has been for quite some time. Furthermore, going back to 2021 what strikes me as truly befuddling is that repetitive nature of said dumb things transpiring. There are a few theories about why this is happening, with regard to wild speculative fervor, but the main one is that The Fed has continued to fail miserably in doing its job of "taking away the punch bowl" when things get too hot, meaning they should have been way tighter with rates and not reverting back to any forms of QE, etc.. Old timers will recall that phrase, taking away the punch bowl, as it was more popular when we had adults in the room to run things in the history of The Fed.

But nowadays no one inside the Beltway has the political stomach for even a garden-variety recession and organic bear market in asset prices. Hence, inflation has been way above target for five years and running. 

Thus, another AMC gamma squeeze may be in the works, as folks make their way back to the cinema this summer and the stigma of the pandemic wears off alongside some burnout with respect to streaming at home. Note AMC back above its 200-day moving average today with its heavy buy volume session in a few years. 

In a true sign of the times, this AMC move is far more logical and rational at this point than the absurd circular financing being rewarded with the AI names at obscene valuations.