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VRA Letter: Extreme OB in a Melt-up Bull Market. Why Stocks Will Continue Higher. The Tesla-Musk Saga. Xtract One Tech News.

Good Tuesday morning. Yesterday’s sell-off had all of the characteristics of a “buy the rumor, sell the news” event. Following the passage of Trumps BBB, investors expected stocks to continue surging higher, but that’s not ...

Posted On July 08, 20255 MIN Read
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Good Tuesday morning. Yesterday’s sell-off had all of the characteristics of a “buy the rumor, sell the news” event. Following the passage of Trumps BBB, investors expected stocks to continue surging higher, but that’s not typically how the market works. "Sell the news” happens more often than not. Throw in some tariff uncertainty along with a market trading at extreme overbought levels and you had a market ripe for a shakeout. The question is, what happens next?

We think we have the answer; stocks will continue to ramp higher. 

To be clear, each US equity index (S&P 500, Dow Jones, Nasdaq and Russell 2000) is trading at extreme overbought levels. And yes, extreme OB is when bad things tend to happen. So why do we remain so bullish? For several important reasons;

1) Money supply and fund flows into US equities continue to surge. In addition to the $7.4 trillion in money markets…ATH's that continues to grow…along with m2 money supply that also keeps powerful new hitting ATH...

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