On Thursday, saw the first new record closing high for the Russell 2000 Index since 2021. We already discussed this on Friday.
That very same day, we also saw new all-time high closing highs for the S&P 500, the Nasdaq-100 and the Dow Jones Industrial Average.
This is the first time in 2025 that all four key stock market indexes have closed at record highs.
In fact, it’s only the 26th time we’ve seen that since 2000.
Here’s the Bloomberg chart showing these stats going back to the 1980s:
Notice all the winning.
There is so much winning going on by stock market investors that it’s difficult to even compare this to prior periods.
Thank You Sentiment
We’re been buying stocks and most definitely taking advantage of these trends.
You’ve been reading my commentary right here in Everybody’s Wrong.
You know what we’ve been buying.
But this isn’t about taking victory laps and dancing in the endzone.
This is about recognizing the opportunity, understanding what happened, and looking forward to the next time it occurs.
You see, all this winning could not have been possible if it wasn’t for the historic pessimism we saw this spring. I even thanked everyone for it in early July.
Because, if you recall, this summer, 90% of democrat voters expected stocks to fall over the next six months.
We loved to see that, and we bought stocks very aggressively in the face of their rage.
But, fortunately, all their anger has continued, now as we enter the Autumn months:
It really is great to see.
Democrats are visibly upset, which is great.
Meanwhile, there are more Individual Investors who are currently bearish over the next six months than there are bullish ones. We couldn’t be more happy to see that.
The short positions in equity futures by asset managers and hedge funds are at their highest levels in years – which is terrific.
And stocks continue to put up record numbers – because it’s a bull market.
As investors who own stocks and are looking to put more money to work into new opportunities in the stock market, seeing all the pessimism among individual investors, asset managers and Democrats is a beautiful thing to see.
That’s what we want.
We only want to become more cautious when there’s widespread euphoria in the market and everybody’s optimistic. (Yes, even the liberals.)
That hasn’t happened yet.
I Call It Both Ways
One more thing…
A friend of mine called me out the other day for taking advantage of Tim Watz’s stupidity.
I mean, Tesla is up 80% since his trolling this March, and many of us made a lot of money because we took the other side of his pessimism.
This is what we do here.
If Ted Cruz, for example, was dumping on some public company who went too woke, and we saw an opportunity to buy that in his face, we would.
This isn’t a political thing. It never is.
I understand there are Sensitive Sallys who are too angry to see the opportunities.
And we’re grateful for those types of people for sure.
Because this is only about making money, that’s all.
Rather than trying to pretend I’m smarter than everyone else, I prefer to spend my time finding ways to just be slightly less stupid.
That’s been working out really well.
I encourage you to do the same.
This Week in Everybody’s Wrong
On Monday, we looked at a simple ratio that can tell us almost everything we need to know about this market.
In my experience, I’ve found composition of leadership to be one of the most important characteristics of bull and bear markets.
And you’ll hear me say this all the time: Sector rotation is the lifeblood of a bull market.
On Tuesday, we returned to the tragi-comic story of Tim Walz.
Minnesota’s governor hates Tesla’s CEO, even though his state owns TSLA stock.
His trash talk is a strong signal, so we’re doubling down too.
On Wednesday, we saw that Gold miners big and small are up triple-digits so far in 2025.
Meanwhile, fund managers own very little of the yellow metal, but they probably need to catch up.
On Thursday, we explained “recency bias.”
That’s putting too much weight on the latest information and ignoring the big picture.
Right now, that’s manifesting in an irrational hatred of small-cap stocks…
On Friday, of course, we talked about how small-caps just ended their longest-ever streak without hitting a new high.
Meanwhile, people are telling me stocks have “come too far too fast.”
Here’s why we stick with the facts and ignore the fairy tales.
On Saturday, we caught up again with Quantitative Analyst Grant Hawkridge.
Grant came up from Down Under this week to join Jason Perz, Sam Gatlin, and me for face-to-face meetings about this project we’re working on together.
Here’s Grant with some reflections on community and, of course, some really useful data.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs