Stock Markets Analysis and Opinion

S&P 500: Why Bulls and Bears Keep Getting It Wrong

2023.05.24 03:12

The tumbled -1.1% Tuesday, giving back a significant portion of last week’s big gains.

Easy come, easy go. Luckily, this reversal doesn’t surprise readers. As I in last Friday’s free post when the index was pushing to multi-month highs:

This is a choppy market and if we’re not taking profits when we have them, we will be taking losses a few days later. The market is still acting well and we don’t need to run for the hills, but it definitely makes sense to peel off some profits, putting a nice chunk of change in our pocket and lowering the risk if this selling continues next week.

And wouldn’t you know it, here we are a few days later, and anyone still holding watched a nice pile of profits slip through their fingers.

We buy when we don’t want to buy, which is exactly what I was readers to do last Monday before stocks popped:

Until something changes, I’m sticking with what is working and that is waiting for the index to rally up to, and through 4,200 resistance. The market is taking its time, but as I’ve been saying for a while, something that refuses to go down will eventually go up.

And we sell when we don’t want to sell, like last Friday when stocks were challenging multi-month highs.

S&P 500 Index Daily ChartS&P 500 Index Daily Chart

Trading isn’t hard when we recognize what’s coming. Last week, this market refused to go down, making 4,200 the next obvious target. But once we got there, it was time to switch directions because this is a choppy, indecisive market, not a directional one.

Bears betting on a breakdown last week were just as wrong as bulls this week betting on a breakout. But when the crowd claims stocks are on the verge of collapse and sell when the crowd is fat, dump, and happy.

This market will make a big directional move at some point, but this is not that point. We are slipping into the slower summer months, and institutional money managers are sneaking off to their summer cottages.

Until they return in September, expect this choppiness and indecisiveness to continue. That means buying the dips and selling the rips for the foreseeable future.

If you are not taking profits when you have them, you won’t have profits left to take.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 97,918.24 4.20%
ethereum
Ethereum (ETH) $ 3,486.05 2.58%
tether
Tether (USDT) $ 0.999188 0.10%
xrp
XRP (XRP) $ 2.29 2.45%
bnb
BNB (BNB) $ 703.56 1.86%
solana
Solana (SOL) $ 198.92 4.38%
dogecoin
Dogecoin (DOGE) $ 0.33246 3.82%
usd-coin
USDC (USDC) $ 0.999797 0.08%
staked-ether
Lido Staked Ether (STETH) $ 3,484.12 2.89%
cardano
Cardano (ADA) $ 0.921949 2.44%
tron
TRON (TRX) $ 0.257017 2.22%
avalanche-2
Avalanche (AVAX) $ 41.08 6.35%
chainlink
Chainlink (LINK) $ 24.83 3.81%
the-open-network
Toncoin (TON) $ 5.84 3.94%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,139.95 2.50%
shiba-inu
Shiba Inu (SHIB) $ 0.000023 3.55%
sui
Sui (SUI) $ 4.58 1.55%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,578.14 4.14%
hedera-hashgraph
Hedera (HBAR) $ 0.310635 4.63%
stellar
Stellar (XLM) $ 0.387708 5.16%
polkadot
Polkadot (DOT) $ 7.43 2.88%
weth
WETH (WETH) $ 3,486.49 2.51%
hyperliquid
Hyperliquid (HYPE) $ 29.34 0.07%
bitcoin-cash
Bitcoin Cash (BCH) $ 463.39 1.61%
leo-token
LEO Token (LEO) $ 9.54 1.43%
uniswap
Uniswap (UNI) $ 14.16 1.89%
litecoin
Litecoin (LTC) $ 108.08 2.34%
pepe
Pepe (PEPE) $ 0.000019 4.00%
bitget-token
Bitget Token (BGB) $ 5.34 16.36%
near
NEAR Protocol (NEAR) $ 5.54 2.11%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,683.29 2.73%
ethena-usde
Ethena USDe (USDE) $ 0.998993 0.17%
aave
Aave (AAVE) $ 376.16 0.71%
internet-computer
Internet Computer (ICP) $ 11.39 6.62%
aptos
Aptos (APT) $ 9.73 3.17%
usds
USDS (USDS) $ 0.999973 0.35%
crypto-com-chain
Cronos (CRO) $ 0.160678 0.22%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.518105 3.00%
vechain
VeChain (VET) $ 0.052286 10.01%
mantle
Mantle (MNT) $ 1.23 3.41%
ethereum-classic
Ethereum Classic (ETC) $ 27.51 1.90%
render-token
Render (RENDER) $ 7.73 0.50%
bittensor
Bittensor (TAO) $ 502.79 1.82%
monero
Monero (XMR) $ 195.89 4.29%
mantra-dao
MANTRA (OM) $ 3.78 1.06%
whitebit
WhiteBIT Coin (WBT) $ 24.86 2.16%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.37 1.26%
dai
Dai (DAI) $ 0.999835 0.11%
arbitrum
Arbitrum (ARB) $ 0.805268 1.27%
filecoin
Filecoin (FIL) $ 5.36 4.46%