When everyone is piling into the stock market chasing returns, that’s usually a sign things are getting frothy and we’re likely due for some type of correction.
To be clear, that is NOT what is currently happening.
Retail investors are selling their stocks.
ETF investors are selling into this strength as well, with total equity ETF flows back in the negative.
And the journalists are still trying their hardest to scare your parents.
I’m sure you’re shocked to hear I believe everybody’s wrong.
Retail Investors Have Sold
Goldman Sachs is out this week with data showing retail net buying and selling for every stock in the S&P 500 over the past month.
They’ve been selling at the most aggressive rate all year.
When retail is selling this aggressively, it’s consistent with the early stages of an uptrend for stocks.
ETF flows suggest the exact same thing. ETF investors bought them up this spring, only to become net sellers once again as we approach summer.
These signs of disbelief are further evidence that everybody’s wrong and that stocks will most likely continue to grind higher throughout the back half of 2025.
Journalists Trying To Be Scary
We’ve talked about how angry the media have been and how much they don’t like how well stocks are doing.
But the best fade of them all is once again The Economist.
It’s great because they’re journalists parading around as economists. So you get both.
Here are their latest scary magazine covers, published over the past few weeks:
I had a hard time believing they were willing to fight this massive bull market in stocks.
So I actually looked inside the magazine to see if it was just the cover that was scary and whether the article itself was more toned-down.
Nope!
The articles were even scarier than the covers.
Meanwhile, the S&P 500 Technology Index closed yesterday at the highest level in its entire history.
This is what we’re doing here: recognizing when there’s a divergence between what they’re telling you and what’s actually happening.
Everybody’s wrong.
You’re literally seeing it in real time.
Journalists Hate Crypto Too!
Don’t look now but they’re trying to scare you out of Crypto as well.
Journalists parading around as economists are telling your parents it won’t end well.
Therefore, we know it likely will.
This isn’t hard.
We just need to pay attention to what’s happening around us.
Prices of assets go up. Journalists scare out the retail investors. And then prices keep going up.
That’s how this works.
It’s when these professional distractors start telling everyone to buy stocks that we want to do the opposite.
Remember the stampeding robot bulls published right before the stock market crashed in 2020?
Yeah, that’s the kind of thing that would turn us into net sellers.
And this ain’t it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs