The Thing Bears Don’t Understand About This Bull Market
Jani Ziedins | Dec 17, 2021 02:39AM ET
It’s been a volatile few sessions for the S&P 500 as the index keeps jumping between dramatic up and down moves.
While we’ve been living with elevated volatility since late November, every bit of down has been matched by an equal amount of up.
If there is one thing we know about stock market crashes, they are breathtakingly quick. Stop to ask questions and you get left holding the bag. But here we stand, three weeks from the initial Omicron outbreak and the index is still within 1% of all-time highs. If these headlines were going to break us, it would have happened by now.
To further compound bears’ confusion, Wednesday the Fed told us to expect three interest rate hikes next year. Conventional wisdom warns us that rate hikes are bad for stocks, yet prices surged 1.6% on the news.
As I’ve been saying for a while, a market that refuses to go down will eventually go up. Bears have thrown everything they can at this bull and it keeps shrugging it off. If this was going to crash, it would have happened by now. Argue with this market at your peril.
No doubt this bull will die like all of the others that came before it. But this is not that point and bears will continue getting humiliated by this stubborn bull.
Tesla (NASDAQ:TSLA) slipped under $1k support last week and that was our final, undeniable signal to get out. Smart traders were already peeling off profits as the stock slipped from $1,200 resistance, but now that we’re under $1k support, there is no excuse to keep holding.
I’m not giving up on this stock and it will probably make higher highs at some point, but I don’t need to hold through the pullback in the meantime. And in fact, I’m looking forward to buying back in at lower prices.
For the time being, this doesn’t get interesting until it gets back above $1k. Until then, keep watching from the safety of the sidelines.
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