Wild Wild Life

Party on (for now)

Here on this mountain top, oh-oh-oh, I got some wild, wild life
I got some news to tell you, oh-oh, About some wild, wild life

So check out mister businessman, oh-oh-oh, He bought some wild, wild life
On the way to the stock exchange, oh-oh-oh, He got some wild, wild life

That’s David Byrne and Talking Heads from the album True Stories, released in 1986. The video for Wild Wild Life was an instant classic on a still nascent MTV with a procession of spoof appearances (young John Goodman is my fave).

Apropos of this most recent trip to the stock market mountain top as shown below in monthly charts of the S&P 500 and Nasdaq Composite. All the way back to the mid-90’s with an overlay of Keltner Channels and two applications of Percent Price Oscillator (PPO) that help track momentum and changes in trend.

Several observations:

• Long stretches of bullish behavior with price appearing to ride the rail of the upper Keltner Channels

• Periodic brief downturns (red bars in both bottom panes) that are quickly repaired - what a trader might call a head fake

• Bear market periods where both PPOs stay red and go deeper for an extended period of time

• At the present time, the lights are green. Prices are at the tippy-top of the mountain, but the trend continues to be your friend. If it feels like a wild, wild life, that’s because it is. But this is nothing new.

As we’ve posted recently, the VIX Mix has rallied back to the bullish segments of our gauge to add support to the ongoing rally in equity markets. At yesterday’s close, 14 of the 17 component indicators were in the green.

In addition, the trend of the VIX Mix is in a solid uptrend and at a fresh new high for the year. Nothing bearish to see here.

Bubble concerns are steadily rising. Here are podcast titles I see just this morning:

• “The AI All-You-Can-Eat Buffet is Ending”

• “Market Bubble Ahead”

• “The Endgame Is Near”

DAMN! The race is on for market pundits to register their bearish calls so they can take credit whenever the market inevitably rolls over in some fashion. But they may need to wait a lot longer than they’d like. The charts are saying that we remain in what we have dubbed the “Bobby McFerrin Regime.” Markets continue to sing “Don’t worry, be happy.” We know that this will change. No one knows when, but we will be watching for clues and keeping our faithful readers informed.

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