Testy Tuesday – S&P 3,135 Tested from Above for a Change


If it's Tuesday we must be testing the 10% line.

Mostly we've been coming at it from the bottom but, this week, we're trying something different and diving back to it from the top. We did this back on June 11th (Thursday, actually) when the S&P fell from 3,123 all the way back to 2,965 on Thursday and that Tuesday (9th) was when we began the fall from 3,222, down 8% from the top in two days. It's only 3 weeks later and no one even seems to remember it happened.

Certainly not Tesla (TSLA) investors, who have driven that stock up to about $1,400 per share as of this morning, giving the company an implied market cap of $270Bn vs $175Bn for Toyota (TM) whose market cap TSLA passed only last week – adding $100Bn in "value" in just the last few days.

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TSLA July 7 2020
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I'm not going to get into how ridiculous this is but the answer is "". This is the kind of behavior you see in a bubble like in 1999, when Yahoo was "worth" more than AAPL or IBM. When things like this happen, it's a good time to just stay away from the markets. We've been trimming down our long positions and we will continue to do so as I'd rather miss the end of the great rally of 2020 than be wiped out in the crash of 2020.

Be careful out there.