If you pay attention to the market, you must know Tesla (TSLA). It shot up over 300% this year. Because it is making big money? Nope! Tesla is the developer and manufacture of electric vehicles (EV). While EV is quite a fashion concept, it is far from economic and can make any real money. But regardless, people just love the concept and chase it to sky. On today's CNBC's "Fast Money," one host explained how investors should view Tesla stock. "The big mistake that people make is they trade it off of fundamentals. This is a premise. This is an idea," he said. This really scares me. Nowadays it becomes more and more like late 1990s before the crash of the tech bubble. People just chased behind any concepts and ideas regardless of fundamentals and reality. When the whole market is full of such kind of euphoria, it is very near the top, if not yet at the top. Look out below!
Now if you look at the chart of S&P 500 (SPY), do you notice the decreasing trading volume (the lower panel) with up moving of the index? This is another indicator that less and less people join the parade with one after another historical high of the stock market. A very bearish sign, at least for the immediate future!! I'm buying more and more VXX as my insurance to be prepared for a quick, swift and severe plunge of the market. It is not if but just when.
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