So what is this, a bull market breaking down or a rally getting ready to make new highs? Depending on the hour, you are likely to find widely differing opinions.
As I’ve been saying for a while, until given a compelling reason to change our outlook, we continue giving this bull market the benefit of the doubt. This bull market started in March 2020 and every wobble since then has been a false alarm. While the cynic will claim the end is coming (and he will be right…eventually), this rally bounced more than a dozen times and is up nearly 100% from the Covid lows. Anyone who pulled the plug early has missed out on a lot of easy money.
That said, I’m never one to blindly hold “no matter what”. I’m in the market when it is going up and I step to the side when it slips under my trailing stops. When the dip turns out to be a false alarm, I get back in and do it all over again.
Will this week’s rebound stick? Maybe. Or maybe it fizzles and retests recent lows. Either way, I’m ready for what comes next. I bought back in yesterday and by acting early, I am already lifting my stops up to my reentry points. Few things are better than free trades.
I still like this bull market, but if this week’s bounce fizzles, I will get out at my stops and try again next week. No harm, no foul.
Bitcoin finds itself at a critical juncture. Buy the bounce above $40k and short the break underneath it. As much as people want to debate the fundamentals, this is nothing more than a sentiment trade and either prices bounce or they don’t. Plan your next trade accordingly.