As a child, I used to watch a lot of old Warner Brothers cartoons on the TV. Looney Tunes, Merrie Melodies etc. Mostly they were organised into either The Bugs Bunny Show or The Porky Pig Show. And some were The Road Runner Show.
Wile E Coyote, the hapless protagonist of the Road Runner Show, is a very American character: endlessly ingenious, inventive, resourceful, optimistic, persistent. And totally incapable of realising when to cut his losses or to learn lessons from history. [I am not sure that the creators of this character intended viewers to read so much into him as that, or what it says about their mid 20th century take on American society.]
When I look at what is happening in the stock market at the moment, where there is a a significant upward bounce from the lows we experienced in March, with the pandemic still raging out of control across most of the world, ravaging communities and the global economy, governments and reserve banks printing money at an unprecedented rate, geopolitical turmoil, all of that, things do not really seem to make much sense. Markets should be much much lower than they are. Things are much worse than they were in March.
What helps me to make sense of it are the Road Runner cartoons, and what frequently happens to Wile E Coyote. Oft times, we see him speeding off in pursuit of the Road Runner. He is so intent on his prey that he fails to see that he has run all the way off a cliff, and keeps on running. Eventually, he realises that he no longer has any ground under him, and looks down. Only then do the laws of gravity take effect, and he falls into the canyon, hard.
Share markets are like our friend the Coyote right now. They have run off the cliff, but have not realised this yet. When they do, Boom!, we get the second wave of the bear market.