The lost 0.34% on the first day back from the long holiday weekend. But more importantly, the index remains well above the psychologically significant 4,500 level.
Tuesday’s early selling found support near 4,510 and now that becomes our new canary in the coal mine. Anything above this level and all is fine and dandy. Slip under this level and we need to watch the price action with a more critical eye.
As we have seen all year, it is really hard for any dip to get started when so few owners are interested in selling. As much as conventional warns us about complacent markets, the critics always forget to mention just how long complacency lasts before the collapse.
I have no idea how much longer this rally can keep going, but at this point, it is not showing any signs of letting up. As much as I question the sustainability of this one-way strength, there is nothing to do other than follow the market’s lead. Until something changes, we operate under the assumption nothing has changed.
Near-term support is setting up near 4,510. Keep holding for higher prices as long as the index remains above this level. Slip under 4,510 and it makes sense to start peeling some positions off proactively. But like every other time we sell in an uptrend, we always turn around and start looking for the next buyable bounce, even if it happens a few hours later.
Remember, just because we harvest some profits proactively doesn’t mean we have to give up on a trade. As soon as this starts going up again, we need to be back in.
Tuesday was an ugly day for . The cryptocurrency floated above $52k this weekend ahead of El Salvador’s adoption of Bitcoin as a national currency. Unfortunately, the rollout was glitchy and that caused the cryptocurrency to tumble more than 10%.
Anyone that’s been trading for a while understands “buy the rumor, sell the news”. Is this what we are seeing in Bitcoin? It is certainly starting that way. As long as this remains under $50k, we have to be careful.
It makes sense to take some profits off the table and wait to buy back in after this reclaims $50k.
Buy low and sell high. Even bulls should be wishing for a larger pullback here so they can buy more at lower prices.