If for every buyer, there is a seller, how can an index trading at all times continue to rise parabolically to prices it has never been? Who is selling up there?

Because of the dynamic nature of good old-fashioned supply and demand.

For every trade in a market like S&P 500 futures, there is a buyer and a seller.But even at all-time highs where no one has previously traded, prices can continue to rise because of the dynamic nature of supply and demand.

Here’s how it works:

1. Demand exceeds supply: When there’s high market confidence and many investors want to buy S&P 500 futures, demand exceeds the available supply of contracts at the current price.

2. Buyers offer higher prices: In order to acquire contracts, buyers will be willing to offer higher prices than the current market price.

3. Sellers adjust their ask prices: Sellers, seeing the increased demand and willingness of buyers to pay more, will then increase their asking prices, also known as the “ask price”.

4. New price equilibrium: A new trade occurs when a buyer and seller agree on a price, and this becomes the new, higher market price, setting a new all-time high.

Think of it like an auction: If an item is highly desirable and there are many people who want it, the bids will go up until a price is reached where a buyer is willing to pay and a seller is willing to sell.

Even at all-time highs, there are still market participants who are willing to buy, according to Investopedia, because they believe the market still has potential to go even higher, or they are employing specific trading strategies like momentum trading.

• Momentum and Optimism: When markets reach new highs, it often generates positive sentiment and optimism, leading momentum traders and investors to believe that prices will continue to rise. This can entice both individual and institutional investors to buy, hoping to capitalize on the upward trend.
• “FOMO” – The Fear of Missing Out: The fear of missing out on potential gains can also play a role, particularly during periods of sustained market rallies. As others appear to be making money, some individuals might be tempted to jump into the market, regardless of the high prices.
• Belief in Continued Growth: Some investors may believe that companies and the economy will continue to grow, justifying the purchase of stocks even at elevated levels.

So what, if anything,  will finally make this out-of-touch-with-reality market come back to earth? Perhaps when the Commander(?) in Chief visits the Federal Reserve buildings and Fed Chief Jerome Powell after the market closed on July 24th?

Nah. The market was “groomed” to now think firing  Jerome Powell would be more good news.

As a semi-famous comedian once said, “You can’t fix stupid“.

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