We're in a bubble. But this isn't just any bubble…

This is a bubble nearly 30 years in the making that's exploding into a generational trading boom.

The degenerates are back, and they're taking over the market one junk stock at a time. Meme stock fever has infected the masses, Bloomberg declares, as message board traders piled into shares of ailing retailer Kohl's Corp. (KSS)earlier this week, quickly doubling the stock early Wednesday morning before it cooled to post a one-day gain of 37%.

Of course, nothing fundamental is going on with Kohl's to explain the sudden change in fortune. It's still the same cheap retail chain — a place where shoppers reluctantly go to stand in line to return Amazon packages — circling the bankruptcy drain.

The KSS pump isn't an isolated incident. The herd has since moved on to stocks like Wendy's (WEN) and GoPro (GPRO) in an attempt to trigger the next big short squeeze. If you're looking for signs of excess froth, there you have it.

But the crazy action we're seeing is just a small slice of an even bigger phenomenon sweeping the markets. Speculators are running rampant, sucking up shares of high-growth, high-risk stocks at an alarming rate.

Traders are jumping in and out of a rotating basket of tech themes ranging from quantum computing to artificial intelligence, drones, and flying car stocks. A new futuristic technology is capturing traders' attention every single week. Blink and you'll miss 'em.

We'll still see pullbacks, gut checks, and corrections. But the relentless hordes of fast-paced traders will continue to return to their favorite stocks when the dust finally clears.

It ain't over yet — not by a long shot. And now, regulators are about to pour gasoline on the fire.

The Next Trading Bonanza

We’re witnessing the next 90s dot-com mania unfolding in real time, a speculative boom that has the potential to send stocks higher than anyone can fathom.

Wall Street and the financial media are constantly pushing fear stories about the imminent collapse of retail traders, 0DTE options, and stock market crashes.

That’s because the explosion of self-directed traders and risk takers is threatening their existence. The media is becoming more fragmented and they’re losing their narrative shaping powers. And traditional wealth managers are hamstrung by old rules and aren’t catering to the younger investing class.

They thought the COVID pandemic traders were dead and buried once the massive squeezes in TSLA and GME fizzled in early 2021. But they’re back, and they’re stronger than ever!

Now, the trend is shifting into overdrive.

Just as the emergence of the first online brokerages helped spur the dot-com bubble, the wave of new betting markets, cryptocurrencies, better brokerages, and ultra-low commissions is fueling the current speculative mania. If you have a phone, you can trade just about anything: meme stocks, Fartcoin, or even bets on who will become the next Fed chair. 

While technology has broken down most of the barriers for this new class of speculator, regulators are now getting in on the action.

The Financial Industry Regulation Authority (FINRA) is finalizing plans to update its infamous pattern day trading rule, Bloomberg reports.

For years, the PDT rule has limited investors with less than $25,000 in their margin account from borrowing to trade four or more times per week. The new FINRA proposal would drastically lower the minimum account balance to just $2,000. This would allow traders with smaller accounts the ability to trade as often as they like.

Like most regulations, the PDT rule was enacted to protect investors from outsized losses and high commissions and fees from frequent trading. Of course, it also robbed smaller traders of the chance to quickly grow their accounts.

With commissions trending toward zero and interest in trading and options hitting all-time highs, a rule change is overdue. And when it does go into effect (regulators say it could take up to a year), it will become another massive tailwind for stocks.

A Trader’s Paradise

It’s easy to get caught up in the negative vibes when the market is roaring higher. Seasoned investors bemoan the breakneck pace of corrections and recoveries. And they scoff at the long list of unprofitable stocks and crazy cryptos launching higher every week.

But it’s important to remember that conditions like these can get even crazier. We probably aren’t near a blow-off top just yet.

Instead of trying to fight the tape or call a top, we as traders need to see the market for what it is — and participate in these conditions for as long as they continue.

The dynamics of the stock market started to change during the COVID pandemic as a new class of retail traders emerged during the lockdowns. When we get these periods of extended froth, the market operates under a different set of rules. Thankfully, nimble traders can exploit these conditions to leverage their returns.

Thanks to the gamification of markets and extreme accessibility through cutting-edge mobile brokers, retail investors are forcing stocks higher (especially tech-themed growth stocks and crypto) and dragging Wall Street analysts and professional investors along for the ride. The establishment can no longer “reality check” the herd. Retail controls the narrative.

Markets will likely remain detached from reality, which will continue to frustrate many fundamental investors. Political and macro events will not have as much impact during these accelerated boom phases. Much like America’s political landscape, the markets will continue to break from the mainstream and thrive in their own bubble.
Why does this matter?

Because right now, anyone with a phone or a laptop can make money by making leveraged bets on a rotating group of speculative stocks that are embarking on parabolic rallies. After the market resets, we’ll likely see another melt-up emerge into the final months of the year.

Expect these trends to accelerate as FINRA rules change and prediction markets gain a foothold in the U.S.

Make no mistake, it’s a trader’s paradise. These are the conditions that will allow you to quickly grow your brokerage account and take your trading to the next level.

Don’t let them pass you by.