Market Musings 190825: US retail investors too excited?
Market Musings 190825: US retail investors too excited?
Podcast: Precious Metals - nowhere near the end of the road
US retail investors are over-exuberant
There are several reasons to believe that the current US stock market rally has reached a stage of US retail investor over-optimism. This is inherently risky, even if it is difficult to call the end of a mini-bubble.
From the early April lows, the technology-heavy Nasdaq 100 index has rebounded 35% in just over 3 months. This is a record rebound for US stocks in such a short timeframe.
Reasons to be cautious over US stocks at current levels include:
Nasdaq 100 up 35% from the April lows to a new all-time high.The ARKK ARK Innovation ETF of tech growth stocks has rebounded 92% from its April lows, now up 27% this year..This 3-month stock market rally is focused on high-growth technology stocks once again - no one cares about health care, food, energy or other more defensive or traditional sectors.Speculative bubble: explosion in zero-day options trading volumes to new record highs, driven by US retail investors.Performance of meme stocks, altcoins...