Tuesday was a mixed session for the S&P 500 as an early push to record highs fizzled and retreated into the red. While a bearish intraday reversal is never a welcome sight, the index bounced off of those afternoon lows and closed pretty much where Monday left off.
Ties go to the trend and even though the index is struggling with 4,800 resistance, the fact we keep holding near record highs is a win for bulls. Stocks fall from overbought levels fairly quickly and trading at these levels for over a week tells us most owners are fairly comfortable with these prices and few are rushing to lock in profits.
As I often say, a market that refuses to go down will eventually go up. At this point, it is only a matter of time.
Bitcoin is stuck in the mud. $50k’s been a ceiling since early December and this cryptocurrency keeps finding itself falling back to the mid-$40k’s. In a mirror of the equity index’s analysis above, the longer this holds near recent lows, the more likely it is to make new lows.
This was a sell as it fell through $60k support in November and December’s $50k violation was yet another reason to abandon ship. At this rate, we will be saying the same thing about $40k as this trades in the $30k’s.
Remember, only fools hold all the way down. Use trailing stops to protect your profits. It is far easier to buy back in after a bounce than it is to wish something higher after a big pullback.