It’s a bull market. That’s the backdrop.
In environments like this, the math is simple. You get paid for owning stocks. You don’t get paid for sitting out. And fighting the trend is usually the most expensive decision you can make.
What’s interesting is how many people still want to do exactly that.
Think about what we’ve already lived through this decade. And we’re barely even halfway through.
A pandemic crash. A full-blown bear market. Multiple double-digit pullbacks along the way. By any historical standard, that’s a lot of volatility packed into a short window.
Now here we are again, with investors bracing for the next collapse.
Another one?
That’s not how this works. Big drawdowns aren’t supposed to show up on a schedule. But after seeing so many in a row, people start expecting them everywhere. They get conditioned to it.
Then you layer on a group of participants who actively want stocks to fall. Not because of price. Not because of risk. Because of politics. Because of narratives. Because rooting against the market feels better to them than making money.
That’s fuel.
When you combine that delusional mindset with heavy short exposure and improving price behavior underneath the surface, you get the kind of setup where moves don’t just grind higher. They rip.
That’s the environment we think we’re in.
And it’s why we’ve been leaning long, and buying stocks the past few weeks.
When Breakouts Hold, Markets Move
The reason we’ve been putting money to work and buying stocks recently is simple.
During bull markets, you want to be long. Not thinking about it. Not debating it. Acting on it.
That’s why we’ve been leaning into areas like banks, biotech, and now even technology hardware. These are not random trades. They’re the groups showing up.
Three weeks ago, we laid out the roadmap.
It came down to three indexes. The small-cap Russell 2000. The Dow Jones Transportation Average. And the Emerging Markets Index.
All three had already broken out to new cycle highs.
The only question was whether those breakouts would hold.
Because that’s the tell. Breakouts are one thing. Successful retests are where trends get confirmed. That’s where potential failed moves turn into real ones.
What we wanted to see was former resistance turn into support. Price comes back down, finds buyers where it used to find sellers, and then turns higher again.
That’s exactly what happened. And once that happened, the outcome wasn’t going to be subtle.
Now look around.
Stocks are moving everywhere. The Dow is up more than 1,200 points. The Nasdaq is ripping. The dollar is getting hit.
This is not defensive behavior. This is not uncertainty. This is what a bull market looks like when it gets going.
And if you’ve been waiting around for confirmation, this is it.
The Beach Balls Are Already Floating
When stocks come under pressure, we go back to a simple idea.
Picture holding a beach ball under water. You can feel it pushing back the entire time. The deeper you try to hold it, the more pressure builds.
The second you let go, it doesn’t drift up. It explodes higher.
That’s how strong stocks behave.
When the market gets hit, most names sink with it. But a handful refuse to go down. They hold their ground. They keep pressing higher even while everything around them is under pressure.
Those are the beach balls.
They’re already trying to get to the surface.
So when the selling finally dries up, those are the ones that move first and fastest. Not the laggards. Not the ones that got destroyed. The leaders.
That’s where we’ve been focused. Buying strength while others are distracted by noise.
And now you’re starting to see the result.
This isn’t the end of the move. It’s what the beginning looks like.
Most people are still waiting for the next pullback.
We’re not.
We’re already in.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs