I was on a late night Twitter Spaces I pop into sometimes on Friday nights when I’m going through my weekly charts.
Helps me tap into the madness of the crowds.
Last Friday, they were all in disarray.
They were talking about how markets are different now, that politics have changed how markets work.
“It’s different this time.”
Nope.
“It’s the same old situation,” to quote Motley Crue…
It’s always different.
It’s not just “this time.”
Price First, Crowd Second
I find myself in this Spaces a couple of times a month, usually on Friday nights after the family has gone to bed and I’m reviewing the weekly data.
I’ve shared with them, honestly, that I look to them for idea flow. Many times I fade them, sometimes I’ll agree.
But recently, I told them I thought the risk was to the upside in stocks – particularly China, small caps, and other speculative growth areas.
They did not agree. They were of the “dead cat bounce” mentality.
I’m not one of those anonymous lurkers online. So if I’m there you know I’m there.
Twitter gives you the option to enter these spaces anonymously. But, since I’m there and have a relatively larger following, they usually invite me up.
And I’ll share a few thoughts with the whole crew.
I appreciate their hard work, their consistency, their passion for markets, and their search for potential catalysts.
Many times I’ll disagree with a take I see. And, sometimes, I’ll act on it and take the other side.
But that’s OK. That’s what makes markets, and I appreciate their perspectives.
I also agree with some takes.
And, many times, I learn something.
This Spaces crew tends to include politics in their discussions.
And they are not particularly keen on President Donald Trump.
I’ve been at this every day for almost 22 years. The facts are different every time.
But human behavior stays the same.
The Trump administration is a huge question mark.
The president and his tariff policy have created historic levels of uncertainty among consumers and investors.
We know. We have the data.
And this isn’t the first time we’ve seen a “Trump Squeeze,” where the uncertainty he and his buddies create sparks a massive unwind to the upside.
Remember Trump Squeeze 1.0?
So many people thought Trump was going to crash the market, the last time he won the U.S. Presidential Election.
But 2017 ended up being on of the greatest and least volatile years in the history of the American stock market:
We saw the fear spike in November 2016.
And we’re seeing it again now.
People are scared. That’s good because we know how to use it to inform our trading.
We know when sentiment levels are this extreme, they don’t stay that way for long.
Consumers and investors change their minds… and optimism builds… as the prices of stocks rise.
Sentiment follows price.
Price moves first.
Then the crowd follows.
I’ll Go Anywhere for a Good Trade Idea
I was laying on the couch Friday night after peacing out from this Spaces shaking my head
These guys are angry AF. It makes sense based on what we’re seeing in the positioning data.
Over the past six months their heads have exploded whenever I’ve mentioned buying China.
I’ve been joining these Twitter Spaces for years now, and before that it was an app called “Clubhouse.” But, today, it all happens on Twitter.
I just tune in to see what the “degens” are doing – they refer to themselves as “degens,” short for “degenerates.”
They tend to call me out when I’m in and ask my thoughts on the market.
They almost always think I’m the crazy one…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs