Portnoy top?

Markets pulled back very sharply on Thursday because there's growing evidence that a 2nd wave is hitting the US.  Secretary Mnuchin insists there will not be any more lockdowns because of this but so far the market is skittish. Was the market just looking for an excuse to sell off because it had gotten overbought? I think so. Although I don't think there will be any more lockdowns, a 2nd wave will at the very least  cause the delay of phase 3 of the re-opening which is where everything gets opened up again as it was pre-COVID.  As such, it's going to inhibit the ability for the economy to hit full potential. Has the market already discounted this? What exactly is the market's discounting ability anyways these days? It's looking more like a casino. I mentioned more than once about the growing cohort of retail traders who have apparently hijacked certain parts of the markets, the junk stocks like airlines in particular.

You may have heard of this trader called Dave Portnoy who has become famous for his rant about how he's better than Warren Buffet claiming he's all washed up. Portnoy is sports gambler turned stock trader who got into trading when he was no longer able to bet on sports. He has a quite a large following. Let me tell you this, I've seen people bash Buffet in late 1999/early 2000 when back then tech stocks were all the rage, and for a few months they got it right, but when the music stopped, they got badly humbled. This guy will no doubt get humbled, it's just a question of when. Could his exuberance signal a market top? It may very will indeed, at the very least for the junk stocks.

Here's another tell tale sign of a top in the junk stocks. Hertz is looking to issue $1 Billion in stock which will very likely end up being worthless. It's quite amazing that this idea was even proposed yet alone may end up happening. It would be insanity if this ends up actually going through.

AAII sentiment continues to be stubbornly bearish but fund flows did jump very notably, but that was before the big drop on Thursday.  As far as the general market goes, I would suspect that this correction has legs but It's going to be very tricky to capitalize on. I expect day to day volatility to be high and erratic with lots of squeeze action.