All-time high in the S&P 500 kicks of a series of reversals
On April 19, Netflix debut The Last Dance, a documentary about the 1993 Chicago Bulls that became a huge hit and was a welcome diversion at the height of the pandemic. It was an incredible documentary about overcoming adversity and turning it into greatness.
The stock market has told its own incredible story at the same time, with the S&P 500 erasing a 34% decline and today trading at a new all-time high.
However today, moments after touching the new high, the market reversed. Stocks are now down on the day and the slide in the US dollar is unwinding, particularly against the commodity currencies.
It's like the market has that empty feeling after accomplishing its goal. It's reminiscent of Jordan again who, in 1993, after winning his third NBA championship and seventh scoring title announced his retirement from basketball at just 30 years old.
"I just needed to change," Jordan later said. He was struggling for motivation; it's something psychologists call the arrival fallacy. "I was getting tired of the same old activity and routine and I didn't feel all the same appreciation that I had felt before and it was tiresome."
Did we just see another episode of The Last Dance? Or at least some kind of algo-driven version of the same thing?
I struggle to see this as anything more than a bit of profit taking, but given the year we've had and the lack of action in Congress, I would hate to be buying stocks at an all-time high.
