According to Alex Krüger, traders have experienced a significant shift in sentiment over the past four months. Initially, there was widespread panic about an impending recession, as reflected by significant sell-offs and increased volatility in major indices. For example, in October 2024, the S&P 500 saw a decline of approximately 8% within two weeks, as reported by Bloomberg on October 15, 2024. This was accompanied by a surge in trading volumes as investors sought to de-risk their portfolios in anticipation of a downturn. During this period, the average daily trading volume for the S&P 500 was reported at 4.5 billion shares, a notable increase from the previous month's average of 3.8 billion shares, according to data from the New York Stock Exchange.

Fast forward to January 2025, traders are now expressing concerns over the economy being too strong. This shift is characterized by a different set of trading behaviors. The robust economic performance has led to expectations of interest rate hikes, which in turn have impacted equity and bond markets. Notably, the yield on the 10-year Treasury note rose from 2.3% in October 2024 to 3.1% by January 2025, as reported by CNBC on January 9, 2025. Such movements have influenced trader sentiment, leading to strategic repositioning across various asset classes. As a result, there has been increased activity in interest rate-sensitive sectors such as utilities and real estate, with trading volumes in these sectors rising by 15% over the past month, as indicated by data from MarketWatch on January 8, 2025.

Technical indicators further illustrate the market's reaction to this economic strength. The Relative Strength Index (RSI) for the NASDAQ Composite, for instance, has remained above 70 since December 20, 2024, suggesting an overbought condition, as per TradingView data accessed on January 10, 2025. Additionally, trading volumes in tech stocks have surged, with Apple Inc. reporting an average daily volume of 120 million shares in early January 2025, up from 95 million in December 2024, according to data from Yahoo Finance. This increase in volume is indicative of heightened trading activity as investors adjust their positions in response to macroeconomic signals. Overall, these developments highlight the dynamic nature of trader sentiment and the continuous adjustments made in response to evolving economic conditions.