So Many Narratives, So Much Confusion
I have to admit it: I have no clue what is going on. The market has essentially been chopping around for the last two weeks as you can see in the tweet above by Jim Bianco.
From a narrative standpoint, bulls and bears each seem to be digging in their heels. The bulls are convinced the price action proves a new bull market began last October. The bears are convinced this is just another bear market rally unsupported by the fundamentals. I wrote about this disagreement a couple weeks ago in “The Technicals Vs The Fundamentals” (Feb 3).
Some stocks – like AirBnb (ABNB) and Palantir (PLTR) – have rocketed higher after earnings this week, while others – like Shopify (SHOP) – have gotten hit.
Under these circumstances, there is enormous pressure on bears to capitulate to the price action. There is a fine line between having conviction and being stubborn. As for me, when I’m unsure about what to do, I do nothing. That is, I continue to gather and assimilate information in an effort to make sense of things.