As Indexes Rise Amid Unrest, Investors Are Skeptical, Fear Missing Out

Against a surreal backdrop of widespread civil unrest, the stock market continues to trend steadily higher. The early action was mixed, but breadth improved during the day and there was a very big spike higher in the last five minutes of trading. There is no obvious news-related reason for the steady strength, but the consistent rise is sucking in money off the sidelines from investors who are skeptical, but fearful that the market is not going to allow them entry.

The market atmosphere is one of the most peculiar that many folks have ever seen. Headlines about riots, a pandemic, and the worst economy since the Great Depression, have absolutely no impact on the market action. In fact, it has created a dynamic of fear and skepticism that helps to keep the upside action going.

There is a wall of worry a mile high and there is sufficient liquidity to keep the market climbing. The arguments about valuations, economics, technicals, and even sentiment don't see to have any impact. There is little choice but to worship at the altar of price action and forget all other considerations.

One of the winners of the new world just reported earnings and it was quite strong as expected. Zoom Video  (ZM)  trounced estimates and guided estimates sharply higher. The stock traded up around $14 initially, but has now faded. It will be very instructive to see if there is a "sell the news" reaction from here. If this market is ever going to top, it seems likely it will have to occur on good news since no amount of bad news seems to matter.

Many casual market observers think that it is easy to trade a market that only goes up, but the truth is that it is extremely difficult when there is no natural ebb and flow or price discovery.

Have a good evening. I'll see you tomorrow.

At the time of publication, DePorre had no position in any securities mentioned.