The Relentless Rhythm of Bull Markets: Why Investors Keep Fighting the Rise

If you’ve ever stood on a beach as a tsunami warning siren blared, you’ll understand the surreal tension of today’s markets. The water has already receded to the horizon. The ground trembles with distant momentum. Yet tourists keep building sandcastles, convinced the ocean’s retreat means they’ve won.

Bull markets hum with this same dissonance. I’ve surfed these waves since the dot-com frenzy, fought the 2008 collapse, and watched crypto’s repeated resurrections. Each cycle follows the same brutal script—a script we’re replaying right now as the MSCI Europe Index kisses all-time highs, the Hang Seng rockets 14% in 30 days, and the S&P 500 flirts with 5,500 despite bond yields screaming recession. The harder the bears pound the table, the higher the staircase grows.

Every bull market begins with institutional skepticism. When the S&P bottomed at 666 in 2009, Wall Street’s consensus called for a “dead cat bounce”. When Bitcoin first breached $10K, Jamie Dimon declared it “a fraud”. Today? Analysts warn that 82% of the S&P’s YTD gains come from just 5 tech stocks—a statistic that ignores one truth: leadership narrows before broadening.

In June 2024, only 45% of NYSE stocks traded above their 200-day moving average. Bears declared the rally dead. But historical data shows this compression precedes major breakouts:

Year	Narrow Leadership Period	Subsequent 12-Month S&P Return
1995	6 months	+34%
2013	8 months	+24%
2016	5 months	+19%

Source: Ned Davis Research

By August 2024, European small-caps began surging—a classic “participation shift” that the bears missed.

Here’s where even seasoned investors falter. As indexes hit records, professionals deploy “hedges” that bleed returns:

• (Utilities returned -7 % in Q2 2024 vs. tech’s +18%)

• (Money market funds hold $6.1T despite inflation eroding 4% annually)

• (S&P 500 short interest hit $1.2T in May 2024; stocks then rose 9%)

Meanwhile, retail investors who simply held SPY gained 22% year-to-date. The lesson? Bull markets punish sophistication.

We’re now entering this phase globally. Consider:

1. 
   The Stoxx 600 just notched 7 straight weeks of gains, powered by overlooked value plays—like German industrials trading at 12x earnings.

2. 
   Tencent surged 40% since China’s gaming curbs were lifted, while Japan’s TOPIX hit a 33-year high on yen weakness.

3. 
   While everyone obsesses over Nvidia, ExxonMobil quietly gained 58% in 2024 as oil topped $90.

Yet the American Association of Individual Investors’ survey shows bearish sentiment at 44%—higher than during March 2020’s COVID crash. This cognitive disconnect is rocket fuel.

Modern markets compound these phases through passive flows and AI trading. When the S&P crossed 5,200 in April 2024, systematic funds had to buy $48B of stocks to rebalance. Each new high triggers more buying—a self-reinforcing loop that turns skeptics into bystanders.

History says bull markets die not from old age but from policy mistakes. Today’s setup?

• The Fed’s real rate (5.25% - 3.4% inflation) = 1.85%—still below the 2.5% threshold that preceded past recessions

• Corporate buybacks are on pace for $1.3T in 2024

• $7T in sidelined cash waits for a 10% dip that never comes

This could morph into the “melt-up” scenario Bank of America warned about—where FOMO overpowers valuation concerns.

You have two choices:

1. , armed with charts of overbought RSI levels and Shiller CAPE ratios.

2. , using dips to build positions in sectors just awakening (European banks, Japanese exporters, energy).

The market doesn’t care about your IQ. It cares about liquidity. And right now, the liquidity tsunami is still rising.

Will there be a crash? Of course. But as J.P. Morgan quipped, “In a bull market, you need a parachute. In a bear market, you need a coffin.” Pack your parachute—but don’t jump yet. The music’s still playing.