Price is Saying "Take Risk"

This is why we study markets through a technical lens.

Every fundamental view, macro thesis, earnings estimate, and narrative will eventually be reflected in price. 

Price is THE derivative that pays. It is the final expression of all the "experts".

Rather than debate each input individually, technical analysis studies the output. 

The agreement point between buyers and sellers. The only level that actually matters for returns.

The goal is not to ignore fundamentals. It is to recognize that the market has already weighed them. My job is simply to listen.

One of the clearest ways to hear that message is through risk. 

When investors are buying riskier assets, they are signaling confidence that risk will be rewarded. 

When they are not, they are telling you to be more selective.

Which brings us to Consumer Discretionary stocks making all time highs. 

That does not happen in a defensive environment. 

These are optional spending businesses. They benefit when confidence is high and capital is willing to take risk.

Markets do not reward risk by accident. This is a collective decision.

So if the market is telling you that risk is being rewarded, the question is simple.

Why would you choose not to take it?

Anyway, that’s my two cents.

Thompson Two Cents Live

Tomorrow at 5pm EST, I’ll be live on YouTube breaking down the market’s benchwarmers.

The stocks no one is talking about. The ones quietly breaking out while attention stays elsewhere.

If price is the message, these charts are yelling.

Set a reminder or catch the replay.

See you tomorrow.