Fundamental Law Says This Market Momentum Will Persist
Markets this strong stay sticky to the upside and don't care what the bears say.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
There wasn’t any major news flow on Thursday, but that didn’t stop the indices, from the S&P500 and Russell 2000 IWM, from moving higher once again. The Magnificent Seven MAGS and Nasdaq 100 QQQ lagged, but Nvidia NVDA had another new all-time high along with 875 other stocks. Breadth was nearly two-to-one positive due to the strong action in small stocks.
This is the nature of momentum when the market is running hot. The indices don’t just suddenly collapse because the bears think that the action is unjustified, and they have a million reasons why it can’t continue.
When the market is this strong, it creates a supply of buyers who are anxious to buy even shallow dips. Many investors hate chasing strength, but they will rush to buy very small pullbacks from extended levels.
This type of market action is the financial equivalent of Newton’s first law of motion, which states that a body in motion will remain in motion in the same direction unless acted upon by an unbalanced external force. Investors do not recognize any external force at this time, although the bears certainly think that tariffs qualify.
There are no major news events scheduled for Friday, so the law of inertia suggests that the trend will continue. Just remember, markets this strong stay sticky to the upside and don’t care one bit about the brilliant, rational concoction by the bears.
Have a good evening. I’ll see you tomorrow.
At the time of publication, DePorre had no positions in any securities mentioned.
