SPX HODLers Win

On Monday, after the SPX hit another all time high, I heard that word.  Something I haven't heard in a while.  Melt up.  It came from the infamous Brian Kelly of CNBC Fast Money.  Powell at Jackson Hole has managed to convert those on the fence to become bulls.  The over the top dovish message with no sense of urgency to start a taper, highlighting that rate hikes have a more "stringent requirement" than tapering.  All but saying that there will be no rate hikes.  

The price action in the meme stocks and the pump and dump sector gives you a good pulse on the market psychology.  There is a lot of greed right now, and with Powell's dovish cooing, a lot less fear.   At all time highs up over 20% on the year.  Entering into the seasonally worst time of the year, September and October.  This would normally make me cautious, but I wouldn't be surprised if we just keep going higher. 

I don't want to short this market, because the uptrend is too strong.  The equity inflows just too powerful.  Its either be long or be in cash.  Shorting isn't a viable option.  

In these powerful uptrends, it doesn't pay to be a micro manager and wait for that high probability dip opportunity to get long.  Usually the market keeps grinding higher than you expect, and the dip is so shallow that you often just end up buying at higher levels on a dip than if you were to just get long on a rally beforehand.  

It wasn't that long ago, a month ago in fact, that at 4400, at all time highs, seemed like too much, too fast, and it looked like we were vulnerable to a dip.  Well, the dip only went down to 4360 for a few minutes before resuming the grind higher, and here we are at 4540.  So in order to avoid a small drawdown, I was waiting for 4300-4320 to buy, missed the bus and am stuck hoping for a dip down to 4400 to buy before the bus leaves me again.  

I don't think I'm the only one who's been left behind by this relentless rally.  Just look at Tony Dwyer, a CNBC permabull, whose been bearish and looking for a pullback since SPX 4000!  

If you are going to get better at this game, objective self-assessment is the first step.  I fumbled away a golden opportunity in 2021 by missing out on the steadiest, low heat, but high octane rallies you will ever see.  Even 2017 wasn't this good, because the rallies were smaller compared to now.  I was there buying near the lows in 2021 (late January) but I managed to turn a potential big gain this year into a small gain. 

It once again reinforced the importance of catching the big picture move, and being positioned small enough that you don't fear short term drawdowns.  And also staying with the trade, even if the trend seems overdone.  Just think, back in April, 4200 seemed way too much too fast, and here we are, at 4540.