Look around. Have you noticed how upset people get when the market hits new highs?
You’d think investors would be thrilled — the S&P 500, Dow Jones Industrial Average, Nasdaq 100, and Russell 2000 all just closed the month at new all-time highs together. That’s rare. That’s strength.
But instead of celebrating, most people are busy complaining — calling the market “overvalued,” blaming the President, or warning about bubbles that don’t exist.
Many of them are suffering from Tech Leadership Denial Syndrome, or TLDS. Others are still sitting out this bull market altogether because they don’t like who’s in the White House. Remember this summer, when 90% of Democrats said stocks would fall over the next six months? How’d that work out?
And then there’s the “this is a bubble” crowd. What they don’t realize is that we wish it were a bubble. Bubbles are amazing — that’s where the biggest money is made. Unfortunately, this isn’t a bubble. It’s just a normal, healthy uptrend.
What’s really going on here is simple: sour grapes.
Investors fell into the same traps that have been tripping people up throughout history. They listened to the wrong voices — economists, journalists, and billionaires on TV trying to scare them — and now they’re watching from the sidelines as markets rip higher.
Instead of adapting, they’re inventing excuses. “Bubbles.” “Grifts.” These are the words often used by narcissists trying to justify missing out on one of the most profitable bull markets of their lifetime.
Not Weak Breadth, Just Sour Grapes
If you’ve been following me for a while, you already know there are a few people who’ve had a major influence on how I see markets. I reference them often in this note.
One of those is Jeff deGraaf, Chairman/CEO of Renaissance Macro Research – someone whose work serves professional money managers around the world.
Here’s what Jeff had to say yesterday about this ongoing “weak breadth” debate — while we at TrendLabs keep telling everyone it’s just a normal uptrend (and that they should probably go back and count again):
This guy is a legend so I would encourage you to read this carefully,
“Breadth is the trend in the path of least resistance. I think a very simple way to think about breadth is that if the Russell 2000 is in an uptrend, then you probably don’t have a breadth problem. In other words, the majority of stocks – 2000 names in the small-caps – if that’s in an uptrend then you probably have a pretty decent breadth environment. That was not the case in 1999. That was a historic breadth divergence where it was only a very small portion of the market that was moving higher, while the rest of the market was moving lower. The breadth problem that a lot of people have had in this market is that there’s a small percentage of names that are outperforming even though a lot of the other names are going up, but you’re just not keeping pace with the market. That’s more sour grapes than it is a structural problem.”
Read that again. He’s exactly right.
If you’re wondering whether that index of 2,000 stocks is in an uptrend or not, here’s your answer: the Russell 2000 Small-Cap Index (IWM) just closed at a new all-time high for the month.
Historically, new all-time highs are not characteristics of downtrends.
Bubbles, Overvaluation, “Crazy” Presidents, and Grifters…
Those are the kinds of words you hear from people being embarrassed by this market — in front of their clients, colleagues, and friends. They’re angry that the market keeps proving them wrong.
They’ve spent months complaining about “grifts” and “bubbles” and “manipulation” — anything to avoid admitting they missed it.
But here’s the truth: valuation isn’t a reliable indicator of future returns. We all know that. The data is clear. Yet people cling to it like a security blanket to justify their underexposure.
You see them online every day — and if you still watch basic cable, you’ll find them on the TV too — talking themselves in circles while markets make new highs.
It’s not “weak breadth.”
It’s not a “bubble.”
It’s not a “grift.”
It’s just sour grapes.
This Week in Everybody’s Wrong
On Monday, I dug into the latest market trends and explained why I’m not a “perma-bull” in the traditional sense… I simply follow what the data tells us about the trend.
On Tuesday, I explored the four basic “fade groups”… the ones who always seem to be on the wrong side of the trade when it counts.
On Wednesday, I examined how sector rotation is proving its power… why the right leadership in risk-on areas is a clear signal the bull market is still healthy.
On Thursday, I broke down why market breadth is telling us what it wants versus what it needs, showing how broad participation, not just headline index gains, is the real driver of the next move.
Market Breadth: Wants vs. Needs
On Friday, I put the spotlight on “Tech Leadership Denial Syndrome,” showing that it’s not just the mega-cap tech names driving this market anymore.
Tech Leadership Denial Syndrome
And on Saturday, I turned things over to Sam Gatlin, who wrote from Naxos, Greece… connecting ancient myths of the gods with what’s happening in today’s agricultural markets.
When the Ag Gods Change Their Minds
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs