On Tuesday the market gapped down out of the gate, headed toward its first set of poles. Those are planted at the 25,000 level on the Dow. Once through those poles, the next set is at the 23,500 low of February 9th. After that, well, somewhere down below what will surely be a blizzard, somewhere deep down the hill.
My purpose today is to make sure everyone who is looking to aggressively play a serious downturn in the market is prepared. The rally of the past week has hit many of our mathematically generated stops. Despite many of those being profitable stops, the net result could have some trading portfolios a little lean on the short side. So if 25,000 is taken out that is the market's first sign of another leg down upon us. If broken and if you exited on the stops that were hit, consider legging back in.
Despite the way this market has reportedly teased the bears only to leave them holding their jock straps as it bounced back in scary Fibonacci retracements, the dangerous duo of bullish sentiment and bearish pattern recognition is still in place. One that offers significant opportunities to profit with the risk:reward model still heavily weighted toward the latter. Take note.
Much to my significant other's discontent (which she never hesitates to communicate is a variety of creative ways) I spent some of the holiday weekend trading bitcoin on the long side. GBTC is reflecting the leg up into the mid-11,000's with a gap-up today from $17.76 to $20.06. This isn't an "overbought/oversold" situation, this is the Wild, Wild, West. It's never too late to buy, nor to sell, just go with the trend which for now, is up.
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