These days, everything seems to be about vibes. The word took hold in the economic lexicon during the Biden years, when economists sought to shield his administration from the impact of the spike in inflation to a 40-year-high.

They called it vibe-flation.

These days, it's associated with several niches of the economy and the stock market.

And they seem to change on a dime.

Overall, they are foreboding.

Retail Sentiment

We saw it this morning with retail investor bearishness surging even further, and well above its historical average of 31.0%.

A momentary calm at the open gave way to a flush of anxiety, sending the so-called fear index (VIX) higher.

Dog Day Afternoon

This anxiety sparked selling in semiconductors, which were already struggling when Nvidia (NVDA) shares couldn’t maintain an early rally attempt. What’s amazing is that some sellers started buying beaten-down software names rather than heading to the sidelines.

We are also seeing buying in names hit by the AI Agent Destruction. Fair Isaac Corporation (FICO), Nasdaq, Inc. (NDAQ), and Accenture (ACN), to name a few.

These whipsaws are tough in real time, but we are learning a lot with each shift.  The challenge is separating vibe from reality.