Let me paint you a picture—Wiley Coyote, legs spinning mid-air, suspended over a canyon, completely unaware there’s no ground beneath him. Sound familiar? That’s the market right now. It’s not a question of if we fall. It’s when gravity catches up.
Today, I’m not here to sugarcoat. I’m not here to pander to momentum chasers or retail cowboys who think buying at all-time highs is some kind of badge of honor. I’m here to give you what I do best—raw, unfiltered market truth. The market is in full-blown Looney Tunes mode.
Risk doesn’t exist… or at least, it’s priced like it doesn’t...
That’s the real madness. There’s no banking risk, no earnings risk, no inflation risk. Hell, we’ve apparently outlawed gravity altogether.
And yet, like Wiley Coyote chasing the Roadrunner with another Acme contraption, most traders today are buying without regard for valuation, breadth, or macro deterioration. They’re overleveraged, overconfident, and frankly, overdue for a reality check.
Don Kaufman calls it “insane,” and I agree. But here’s the catch—it’s not correcting yet. You’ve got to understand this: markets don’t crash on a whisper. They crash when everyone’s in, leveraged up, and blind to risk. We’re not there yet, but we’re damn close.
Peter Berezin from BCA Research nailed it: this is a Wiley Coyote market. All flash, no footing. He calls it “manic performance chasing” and “deteriorating fundamentals masked by AI headlines.” I call it the illusion of invincibility. And the higher we go, the more fragile we become.
I’ve been in this game too long to chase this kind of exuberance. I’m rotating, not retreating. I’ve got longs in Merck, J&J, and Pepsi—stocks that are still digestible in this overbaked market. But I’m also leaning hard on the short side. Chewy, Coke, Monster—those are just a few names I’ve targeted because they’re priced for perfection in a world teetering on imperfection.
And don’t get me started on DoorDash. Analysts waited until it went from 150 to 240 before upgrading. That’s not analysis. That’s momentum worship. If they worked for me, I’d show them the door—exit stage left, as Snagglepuss would say.
Here’s the bottom line, folks: you’re either preparing for the fall or you’re part of the fall. The big players—Bank of America’s clients, for example—are already heading for the exits. Retail traders are the only ones left buying the top.
This is a time for discipline, not delusion. You don’t survive markets like this by chasing charts. You survive by honoring fundamentals and recognizing when the cartoon ends and the freefall begins.
So if you’re buying calls on the S&P today thinking you’re the Roadrunner—meep meep—you’d better check under your feet. Because what you think is solid ground? It might just be air.
By Professor Jeffrey Bierman, CMT