This is what I took away from today’s morning briefing, which you can subscription To be delivered to your inbox every morning with:
Stock markets are back on the rise after tumbling in early August.
In the two weeks following the S&P 500’s August 5 decline, it added $3.7 trillion in market value, with the “Magnificent Seven” accounting for $1.6 trillion of that value.
While Nvidia (NVDA) and AI trading are leading the rally, the risk-on rally is getting widespread participation — even from often-forgotten corners of the market like meme stocks.
In May, we tracked the 5-day volatility index of Yahoo Finance’s proprietary stocks. The list of stocks includes GameStop (GME) and AMC Entertainment (AMC), along with Carvana (CVNA), Beyond Meat (BYND), Kodak (KODK), Palantir (PLTR), and Coinbase (COIN).
Any upward or downward movements among members of this group that are greater than three standard deviations, measured over the previous quarter, are recorded and aggregated. When there are at least three triggers within a five-day period, a signal is generated.
Since the August 5 low, Carvana, Palantir, Beyond Meat, and Coinbase have all recorded price volatility — with the composite signal peaking at 7 on August 9.
(The all-time high — which dates back to December 2020 — was 14, recorded on January 28, 2021, during the original GameStop frenzy.)
As we explained in May, meme stocks were once a reliable source of On the contrary This was a signal during the bear market of 2022. Investors chased every emerging rally by bidding up lagging stocks — before the overall market fell.
But this was not the case for most of this bull market, as signals were distributed throughout the price rises. The most recent signals were generated as the start of the rise approached.
In fact, the recent price action in meme stocks that produced volatility triggers appears to be more explained by individual factors and overall market volatility than by any underlying factors. Meme.
For example, Palantir gave an upbeat earnings forecast on August 5, turning a 14% loss at the open that day when the yen was rising sharply into a 2.6% loss at the close.
Coinbase’s earnings have recently been up and down with the fortunes of cryptocurrencies and Bitcoin. Carvana reported earnings on July 31, which led to a big rebound on August 1 — just before the general market turmoil.
Perhaps the exception is Beyond Meat, whose shares jumped 40% on August 9 for no apparent reason.
The suggestion that meme trading is pure meme-trading—that unexplained mutation that defies any basic or rational justification—still holds for the modern trader.
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