Alright, buckle up for a super quick explanation of a “market melt-up!”
Think of a snowball rolling downhill. As it goes, it picks up more snow, getting bigger and faster. A market melt-up is kinda like that!
It’s a sudden, dramatic, and often unexpected surge in stock prices. We’re talking significant gains in a relatively short period.
What fuels the fire?
FOMO (Fear Of Missing Out): People see the market going up and jump in to get a piece of the action.
Liquidity: Lots of cash floating around looking for a home.
Sentiment: Positive news and overall optimism can drive even more buying.
Why is it a concern?
Melt-ups are typically unsustainable. They often detach from underlying economic fundamentals and can lead to a painful correction (a sudden and sharp drop). What goes up fast, can come down even faster!
Think: Rocket ship taking off…but eventually running out of fuel.
Bottom line: While a market melt-up can be exciting, it’s important to be cautious. Stay informed, understand the risks, and don’t get caught up in the hype!
This "melt up" is actually fueled by greed and FOMO, the house of cards cannot stand forever. The market has already lost over 2000 points and on its way to shed at least 5000 more. The weasel will make certain that it loses 10,000 plus. Stay the course if you are young but watch out below if you are retired.
Melt up simply means an unexpected bull run or how if you're short your losses can still go to be infinite thus trying to "cover" through various options strategies or just trying to find the physical US cash dollars to cover what has been BORROWED becomes well nigh impossible outside of becoming a forced buyer…again all using leverage just as in any other type of bet. Higher interest rates make the cost of shorting even more expensive. This makes being a lender (cough cough "New York Community BanCorp" cough, cough) insanely dangerous as you might be lending to any number or manner of financial shenanigans and not even know it…items with "unknowable risk" as opposed to say lending into commodities or real estate which are by definition speculative and high risk. To prove the point simply look at the massive budget surpluses many States had most spectacularly California that have now turned to deficits. One might look at that and say "clear proof the economy is bad!" and not in any way be wrong…but then US equities start not just rising "against the trend known as reality" but even having "breakouts through over all time closing highs." Meanwhile in China for the exact take on this type of situation where equity markets continue to plunge far worse than any economic fundamentals would seem to imply as warranted…this also be surprisingly normative in the World of equity trading namely "don't try and make sense in either a mania or a depression" or "driven purely by emotion" and not fundamentals. Long $IBM International Business Machines strong buy.
The massive QE of 2020 is still showing up in the market. It's never been seen before and experts are still not taking account of all the money that the FED has still not pulled back in yet.
This "melt up" is actually fueled by greed and FOMO, the house of cards cannot stand forever. The market has already lost over 2000 points and on its way to shed at least 5000 more. The weasel will make certain that it loses 10,000 plus. Stay the course if you are young but watch out below if you are retired.
When everyone is greedy, it’s time to sell
I hate listening to that woman talking, very annoying
Melt up simply means an unexpected bull run or how if you're short your losses can still go to be infinite thus trying to "cover" through various options strategies or just trying to find the physical US cash dollars to cover what has been BORROWED becomes well nigh impossible outside of becoming a forced buyer…again all using leverage just as in any other type of bet. Higher interest rates make the cost of shorting even more expensive. This makes being a lender (cough cough "New York Community BanCorp" cough, cough) insanely dangerous as you might be lending to any number or manner of financial shenanigans and not even know it…items with "unknowable risk" as opposed to say lending into commodities or real estate which are by definition speculative and high risk. To prove the point simply look at the massive budget surpluses many States had most spectacularly California that have now turned to deficits. One might look at that and say "clear proof the economy is bad!" and not in any way be wrong…but then US equities start not just rising "against the trend known as reality" but even having "breakouts through over all time closing highs." Meanwhile in China for the exact take on this type of situation where equity markets continue to plunge far worse than any economic fundamentals would seem to imply as warranted…this also be surprisingly normative in the World of equity trading namely "don't try and make sense in either a mania or a depression" or "driven purely by emotion" and not fundamentals. Long $IBM International Business Machines strong buy.
The massive QE of 2020 is still showing up in the market. It's never been seen before and experts are still not taking account of all the money that the FED has still not pulled back in yet.
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