Not too long ago, the consensus was clear: Global markets were doomed.
Tariffs were supposed to crush equities everywhere.
Recession was “right around the corner.”
The narrative this spring was nothing short of apocalyptic.
And yet… the market did what it always does: It embarrassed the consensus.
Instead of collapsing, we just witnessed one of the strongest global rallies in history. If you bought into the doom-and-gloom, you missed it.
But if you stayed focused on price – on what markets were actually doing – you had a massive edge.
I’m not saying this to take a victory lap. That’s not the point here.
The point is this: It will happen again.
Narratives will drift miles away from reality, investors will panic, and the market will quietly hand opportunities to those who are paying attention.
China New 10-Year Highs
If you want leadership, look no further than China.
One of the biggest blind spots for investors last year was missing just how strong Chinese equities were.
While the U.S. market delivered an impressive 23% gain in 2024, China actually did even better: The iShares China Large-Cap ETF (FXI) was up 29%.
That relative strength was already sending a message. And here we are in 2025, with China once again outpacing the United States.
Take a look at the broader Shanghai Composite Index. This summer, it broke out to fresh 10-year highs after building a massive base:
That’s not just noise – that’s a structural development in one of the world’s most important equity markets.
The consensus heading into Trump’s landslide win was that China would be the big loser. The reality? The complete opposite.
This is what makes markets so powerful. The price action was tipping its hand all along – and anyone paying attention had the chance to catch one of the strongest global moves.
Israel Up 50% in a Year
For the past couple of years, the headlines coming out of Israel have been overwhelmingly negative. Much of that coverage has been serious and justified. To be clear, I’m not here to debate geopolitics.
But here’s the thing: While sentiment has been horrific, the market has been telling a completely different story.
The Tel Aviv 125 Index just ripped to fresh all-time highs. It’s up 50% over the past 12 months – and nearly 30% year-to-date:
That’s not just strength… that’s dominance.
Remember, Israel was also one of the few countries to outperform the U.S. in 2024. That’s what relative strength looks like.
Just like we’ve seen in China, Israel’s stock market has been quietly leading while the narrative screamed the opposite.
This is classic market behavior: Bad headlines… bearish sentiment… bullish price action.
So ask yourself: Are you still trading the narrative, or are you paying attention to the data?
Made Europe Great Again
They kept telling me Europe was a mess.
“Germany is in recession,” is the Bronx Cheer I keep hearing.
Meanwhile, Europe’s STOXX 50 Index Fund (FEZ) – basically the Dow Jones Industrial Average of Europe – just closed the month at its highest level since 2007.
That’s not weakness. That’s leadership.
And it’s not just a broad index story. Country by country, the strength is undeniable.
Italy’s stock market just ripped to new 18-year highs:
Everyone knows Italy for the food, the wine, the culture – but rarely for its stock market. Well, add that to the list now.
How about Belgium?
The Brussels BEL 20 Index just closed at new all-time highs:
Spain, Ireland, Austria, Greece… I could keep going down the list. European equities have been ripping across the board.
The point is simple: The narrative was dead wrong. And when sentiment gets that lopsided, it usually is.
That’s where we come in. This is literally why we called this letter Everybody’s Wrong.
My job is to find the disconnects between the story and the data, highlight them in real time, and profit from the gap.
Stocks around the world are just the latest example. And this one isn’t over yet.
But here’s the promise: It’ll happen again.
Headlines will scream disaster, the crowd will lean the wrong way, and the charts will quietly point to opportunity.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs