Investors are Becoming Fearless

Stocks only go up or at least that's what it feels like right now and over the last few weeks. Even oil and gas stocks are rallying and were the top performing sector in November. 

For months on end FAANMG seemed to be dragging the market along with it but the last month we've seen a shift in leadership that has finally been able to stick around for longer than a few days.

Right now the only sector that's struggling is precious metals (Gold & Silver and the related stocks). They are the worst performing industry/sector over the last 30 days.

Other industries such has electric vehicle stocks, ESG/alternative energy, cannabis as well as some recent IPOs in the software space have made some massive moves in a short amount of time.  

Speculation is alive and well but right now is one of those times where it seems like everyone is making money. I'm hearing conversations about stocks from those who rarely speak about trading and investing. Because of this, I thought it was time to take a look and see what investor sentiment is telling us.

The CNN Fear & Greed Index closed above 90 on Friday for the first time since the March lows. A clear sign of mass involvement in the equity markets.

Fund flows into global equities is the highest it's ever been after a 65% gain in the S&P 500. What happened to buy low and sell high?

For the first time in nearly three years the American Association of Individual Investors (AAII) survey is showing a bullish reading above 40%.

The Put/Call Ratio hit an extreme low today. Who needs to hedge when stocks only go up? The last two times it hit 50, a correction was just around the corner.

Sentiment indicators are not perfect and can't predict the future, but they are a good reminder of what type of environment we are operating in, especially if you are trading or putting fresh capital to work.

There's definitely some "froth" in this market but I continue to see trading opportunities in potential breakouts. 

Apple is On The Verge of Breaking Out

AAPL looks like it is on the verge of breaking out after consolidating the massive gains from the March lows.

A breakout above $120 could really get things moving towards the old highs near $140 and possibly higher.

Peloton Interactive (PTON) is breaking out of a similar pattern after correcting 35% from it's highs. Most of the "stay at home" stocks have corrected over the last few weeks and could be ready to get moving again. Follow through will be key.

The music will eventually stop (or at least pause) but there's no harm in continuing to dance as long as you are managing your risk and exercising proper position sizing.

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