4 days ago
Stock rally sparks bold words from trading legend — his unexpected take is going viral
US stock market is seeing record highs since April. But trader Mark Minervini is cautious. He sees trouble under the surface. Breakout stocks are failing. Unemployment is up. Inflation remains a concern. Minervini advises careful risk management. He notes the market is not yet easy. Investors should watch economic signals.
Tired of too many ads?
Remove Ads
What Triggered the Stock Market's Sudden Rebound?
Tired of too many ads?
Remove Ads
Why Is Mark Minervini Cautious Despite Record Highs?
Are Breakout Stocks Failing to Deliver Gains?
What Economic Warning Signs Are Emerging?
FAQs
Tired of too many ads?
Remove Ads
The stock market has been on a hot streak since the beginning of April, reaching record highs and leaving many amazed by its rise, as per a report. But even though Wall Street celebrates and indexes reach new heights, one seasoned trader is sounding a note of caution, and his message is quickly catching on social Minervini, trading legend with his sharp technical acumen and high profits, is sounding the alarm that while the market has recorded fantastic gains, but he has noticed some trouble under the hood that could give active investors pause, as reported by The April 9, the S&P 500 has risen over 25%, and the Nasdaq Composite has jumped 35%, both reaching new record highs, reported The Street. The trigger was US president Donald Trump's surprise suspension of retaliatory tariffs he announced on April 2—"Liberation Day", which led some traders to feel that the threat of all-out trade war was over and rekindled investor confidence, according to the most traders, the rally's pace and size were a shock, particularly following the S&P 500's fall of 19% between February and April's low, priced in enough risk to set the stage for persistent gains, as reported by The Street. Bears argued that lofty valuations and a sputtering economy put stocks at risk of a reckoning, wrote The Street in its READ: No Reddit, no visa? Indian's US entry blocked after failing to share account details Amidst the market euphoria, Minervini shared a candid analysis on social media X (formerly Twitter) that has now gone viral among market observers and traders, according to the report. He uses price action to make decisions about his buy and sell, as reported by The Street. Even though the rally since April has been rewarding, he has noticed some trouble under the hood that could give active investors pause, as reported by The wrote on X that, "If you are a breakout trader using tight stops — even though the indexes have ripped higher — you have likely experienced a low batting average," as quoted in the who was featured in the 'Market Wizards' book series and has won the US Investing Championship twice (including a record 334.8% return in 2021), is known for a strict, rules-based trading style that emphasises buying strong stocks as they break out, according to the READ: Tomorrowland fire shock: Main stage engulfed in flames days before start of massive festival - what we know He pointed out that, "The frequent occurrence of squats and outright failures continues to dominate as a theme around breakout levels, clearly signaling that conditions remain challenging and volatile around key risk levels," as quoted in the report. Minervini explained that, "These failed breakouts reveal persistent overhead supply and insufficient follow-through from institutional buyers, underscoring a risk off market with regard to broad-based participation," as quoted by The Street trader revealed that, "I remain an active participant and careful observer, adjusting day by day and ensuring risk management remains my top priority," and added that, "As far as breakout stocks are concerned, this is NOT yet an Easy Dollar environment. For the most part, we are still fighting for pennies," as quoted in the comments come as unemployment, though still low at 4.1%, has risen from 3.4% in 2023, layoffs have risen 80% year to date through May, and inflation, though better from its peak in 2022, remains sticky with core PCE inflation still at 2.7%, which is where it was in January, according to The Street sees a lack of broad participation and failed breakouts, signaling institutional hesitancy and high an eye on unemployment, inflation (especially core PCE), and the Fed's rate decisions.
