Market In FOMO Mode, Don’t Make Emotional Trading Decisions
Good evening, traders and investors.
Equities kicked off the week on a strong note. The Nasdaq led the charge, rising +1.5%, while the S&P 500 and Dow also advanced. The Russell 2000 (small caps) and micro caps (IWC) bounced, but remain mid-range after last week’s swings.
Momentum continues to oscillate between fear and FOMO, with traders chasing the market higher one day and bailing out the next. The Magnificent Seven carried much of today’s upside, driving the Nasdaq back toward all-time highs and reigniting optimism—but also creating another short-term overbought condition.
Market Insights, News & Economy
Stock Market Trend
Today’s gap-up open fueled broad excitement, but our indicators show the move was driven largely by emotion, not commitment.
- The FOMO indicator turned red throughout most of the session—signaling overbought conditions as traders piled in “hand over fist.”
- Despite strong gains, market internals remain weak; several sentiment and volume studies show big money rotating out as retail inflows dominate.
- On the S&P 500, today’s bars still sit inside last week’s large red candle, keeping the overall structure technically bearish.
For now, the trend remains up, but the setup mirrors past topping phases, where institutions distribute shares while public enthusiasm peaks.
System Status & Positioning
Our ACS and BAN strategies both executed exits this morning near the open, locking in solid gains as volatility increases.
- We’re on the sidelines, protecting profits while waiting for clear confirmation of the next directional move.
- SPY and QQQ both exited near morning strength.
- The market is now in what I call “no man’s land”—neither a confirmed breakout nor a confirmed breakdown.
Until fresh trend signals form, our focus remains on capital preservation.
Hot List & Sector Rotation
Our proprietary Hot List—which blends money flow, sentiment, and volume metrics—showed mostly “risk-off” readings today.
Even as prices climbed, the data suggests this was an emotional bounce, not a well-funded rally.
Roughly half of sectors remain in short-term uptrends, half in downtrends.
The long-term stage analysis still reads bullish, but short-term signals remain indecisive.
Overbought & Oversold Psychology
Recent price swings perfectly illustrate how markets oscillate between panic selling and FOMO buying.
- Last week’s tariff panic flushed out weak hands.
- The next day, those same traders piled back in, creating back-to-back extremes.
We’re currently at the upper end of that emotional cycle again, suggesting a possible short-term pause or pullback within the next session or two.
As shown in my book Technical Trading Mastery (Chapters 10–12), combining trend, panic, and FOMO indicators gives powerful insight into where emotions sit within each cycle.
Market Momentum Bar Chart Tool
I shared a new short-term momentum tool with members recently—a bar chart oscillator based on multiple high-volume stocks.
Here’s how it works:
- Readings above 101 = short-term overbought (likely pause/pullback).
- Readings below 99 = short-term oversold (likely bounce).
Today’s reading sits well above 101, implying the market could see a brief exhaustion gap higher tomorrow, followed by potential intraday selling as profit-takers step in.
In plain terms: today’s buyers are tomorrow’s sellers.
Member Questions & Insights
1. Oil & News-Driven Moves
One member asked why we “ignored” a past oil spike but reacted to the recent stock market drop.
The answer lies in context and structure.
- The oil spike was a one-off, news-driven event within a steady downtrend.
- The recent equity drop occurred amid multi-sector money flow changes, signaling deeper structural shifts.
In short, oil’s move was noise; the stock market’s move is part of a broader rotation.
2. Uranium’s Parabolic Phase
Uranium remains a crowded trade—volume near records, volatility extreme.
The rally has reached measured move targets, gapped above Fibonacci extensions, and immediately reversed—a classic exhaustion move.
At this stage, uranium’s path is a coin toss, with potential for both blow-off spikes and sharp red bars.
3. Gold & Volatility
Gold continues to surge, with 4–5% daily swings becoming the new normal.
Measured moves have completed, leaving us in “no man’s land” for new setups.
Short-term target extensions point toward $4,625, but momentum could fade anytime.
For now, gold remains bullish but extended and volatile.
4. Hot List: GDX, COPX, and Lithium
- GDX: Risk-off reading. Short-term uptrend and long-term bullish, +47% since its last trigger 54 days ago.
- COPX: Momentum pullback ended its prior trigger; still holding a bullish chart structure.
- Lithium: Lost its trigger on last week’s volatility but retains strong moving-average alignment—price simply resetting.
Overall, these sectors remain constructive as long as the broad market trend doesn’t roll over.
Key Takeaways
- Equities: Strong day, but internals remain weak; rally driven by emotion.
- Trend: Still long-term bullish, but in a Stage 3 topping phase.
- FOMO: Elevated; short-term overbought conditions returning.
- Gold/Uranium: Extended; volatility high—protect gains.
- Oil: Still weak; ignore short-term news spikes.
- Hot List: Risk-off bias despite price gains; patience warranted.
Bottom Line
Today’s strength feels good, but it’s built on shaky ground.
We’re in a topping phase, where retail enthusiasm and emotional trading dominate while smart money quietly steps aside.
Expect possible gap-up exhaustion tomorrow, followed by choppy action as traders flip from greed to fear again.
We’re sitting in a position of strength—profits locked, capital protected, and ready to re-engage when a clean trend re-emerges.
Talk soon, and trade safe.
Chris Vermeulen
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