Anxiously euphoric, two words that do not belong together and two human emotions that should not exist side by side. But here we are, suffering from both at the same time. The market rally of the past few months has been difficult if not impossible to trade if you care at all about market risk. Valuations are elevated, the Fed is about to let assets roll of its books, there is chaos on the Korean peninsula, Spain may fracture into two counties as the people of Catalan vote to secede from the country. The fracturing of Spain is a bad sign for the European project. If you don't want to be governed by some people locally, you are not likely to want to be governed by some people far away, that speak a different language and follow a different culture. a hundred miles away.The only winners here have been those that were long equities before the rally started. Those that trade the
The only winners in the stock market have been those that are "buy & hold" investors. Those that buy and sell the short-term trends, rotate from sector to sector and pick stocks have lagged significantly. As a whole, the only winners in the active trading game were the momo investors who jumped on the Mega & Large Cap stocks held in the S&P 500.
One piece of evidence that supports this view is the performance of "human" run funds versus "machine" run funds.