Have you ever watched a market bounce so hard and so fast that it almost feels too good to be true? That’s exactly where we are right now.
Two weeks ago, many of us were nervously eyeing oversold readings and wondering if the dip would deepen. Today? The same indexes are knocking on overbought doors, and some of the hottest names in the market are leading the charge. It’s the kind of swing that makes you check your screens twice.
From Fear to FOMO in Fourteen Days Flat
Let’s be honest – the speed of this recovery caught a lot of people off guard. After a shaky November start, comments from a major Fed official about a possible December rate cut lit the fuse. Since then the S&P 500 has climbed nearly 5% and sits just a stone’s throw from its all-time high.
The real eye-opener, though, isn’t the price action itself. It’s what our favorite momentum gauge is telling us.
The Short Range Oscillator Just Did Something Rare
If you follow technicals at all, you probably know the S&P Short Range Oscillator. It’s a clean, no-nonsense measure of near-term momentum. Readings below -4% scream oversold. Above +4% shout overbought.
On November 20 we were flirting with -3.73%. Close enough to oversold that many contrarian ears perked up. Fast-forward to the close two days ago and the same oscillator printed +4.06%. That’s one of the quickest oversold-to-overbought flips in recent memory.
A swing this violent usually means two things: strong underlying demand and the potential for at least a brief pause while the market digests the move.
Does that mean we’re about to roll over? Not necessarily. Mild overbought conditions – and +4% definitely qualifies as mild – can persist for weeks when money keeps rotating into new leadership. Think of it like a runner catching a second wind.
Still, when the reading pushes toward +6% or +7%, history shows the odds of some profit-taking rise sharply. For now, I’m watching but not panicking. The market can work off overbought readings through simple sector rotation rather than an outright pullback, and that’s exactly what seems to be happening.
What Usually Happens After These Big Swings
Quick swings like this often lead to one of three outcomes:
- Consolidation – the index trades sideways while the oscillator slowly drifts lower.
- Rotation – money moves out of the recent winners and into laggards, keeping the major averages afloat.
- Correction – if new buying dries up, the market gives back some gains and the oscillator resets.
Right now rotation feels like the path of least resistance. Energy, industrials, and certain pockets of technology are absorbing fresh capital while some of the earlier leaders take a breather.
One Stock Perfectly Riding This Wave: GE Vernova
Speaking of leadership, let’s talk about a name that has quietly become one of the best-performing large-cap stocks of 2025: GE Vernova.
Most people still think of GE as the old conglomerate. But after the spin-off, GE Vernova is purely focused on power generation, wind, and grid solutions – and the market is finally waking up to the multi-year tailwinds in front of it.
Year to date the stock is up almost 100%. And yet, if next week’s investor day delivers even a modest guidance raise, I suspect there’s plenty more room to run.
Why the Bull Case Keeps Getting Stronger
There are three simple drivers that keep analysts pounding the table:
- Exploding demand for natural-gas turbines – data centers, manufacturing re-shoring, and retiring coal plants all need reliable power now.
- Grid modernization backlog – utilities are finally spending again after years of underinvestment.
- Pricing power – order books are full, lead times are stretching, and the company can push through healthy price increases.
Last December management laid out a 2028 outlook that already looked ambitious: roughly $45 billion in revenue and mid-teens EBITDA margins. Since then orders have consistently beaten expectations.
Recent analyst previews suggest the new 2028 targets could come in around $48 billion revenue, 16% margins, and as much as $18 billion of cumulative free cash flow – and even those numbers might still be conservative.
Summary of recent Wall Street notes
Think about that cash-flow number for a second. $18 billion cumulative through 2028 at a company currently valued around $170 billion. That’s real money that can fund buybacks, dividends, or acquisitions.
What to Watch at Next Week’s Investor Day
The event is scheduled for Tuesday afternoon. Here’s my short watch list:
- Any upward revision to the 2028 framework (revenue, margins, cash flow).
- Color on gas-turbine backlog and pricing trends into 2026-2027.
- Updated thoughts on the offshore wind recovery timeline.
- Capital allocation priorities – especially the pace of share repurchases.
Even if management stays characteristically cautious, the underlying demand trends are so strong that any confirmation of the current trajectory should be enough to keep buyers engaged.
Putting It All Together for Your Portfolio
So where does this leave us as investors?
The broad market is overbought but not dangerously so. Leadership is broadening out beyond the usual mega-cap suspects. And certain high-quality industrial and energy names – like GE Vernova – still look like they have multi-year runways even after big gains.
In my experience, these are the environments where staying fully invested but selectively raising cash on strength works best. Trim a little around the edges when your momentum indicators flash yellow, redeploy that capital when they reset or when new themes emerge.
The rally since mid-November has been impressive, no question. But the most rewarding part of bull markets often happens after the initial sharp rebound, when money starts chasing quality compounders rather than just momentum.
If the oscillator keeps climbing toward more extreme levels, I’ll be happy to take some chips off the table. Until then, I’m enjoying the ride – and keeping a very close eye on names that still have fundamental accelerators ahead of them.
After all, in this business the goal isn’t to call the exact top. It’s to ride the trend as long as it makes sense and to own the companies that keep delivering no matter where the oscillator sits on any given day.
Stay nimble, keep your watch lists updated, and remember – sometimes the best trades are the ones you don’t overthink.
