Bull Run Appears To Have Plenty Of Energy

2020-09-02

Are you tired yet?

This bull run has traders exhausted from keeping up with all the sudden spikes.

Monday kicked off strong, followed by the first day of September with an S&P new lifetime high and today the Dow spiked like there was no tomorrow.

Barring any big crashes, expectations are this momentum continues moving higher with the opportunity to catch big wins through the end of the year.

How strong is this run?

Keep in mind this has been the fastest market recovery in recorded history. Today the Dow closed at 29,100 after spiking over 500 points in intraday before recoiling to a 454.84-point gain.

The previous lifetime high of 29,543 in the Dow (in February) was followed by a huge correction (coronavirus pandemic crash), followed by this ongoing recovery.

As today shows, the market is closing in on the previous high with a psychological benchmark of 30,000 sitting on the horizon. All this even as economic and social issues remain unresolved and the U.S faces a contentious presidential election in two months.

Can this bull keep running?

Estimations are this bull has plenty of energy left in the tank.

Not that a stumble along the way may catch some people off guard.

Remember, the previous high this year was followed by an unexpected correction (pullback).

There are signals to indicate caution. This includes two indexes closing outside the upper Bollinger band which can translate into a reversion to the mean. This could possibly be a sharp gap down or just enough of a pullback to give this bull run a breather before that final push to new all-time highs.

Simpler’s are balancing optimism and caution with a strong dash of patience.

As the market presents opportunities, steady patience helps ride out the setup as the market twists and turns. The key is to ride out the setup and take profits according to a predetermined plan while letting the move run, even when market “noise” is exhausting.

In this market it is key to focus on significant, high-probability trades. Avoid a lot of “clicking” on the trading platforms and allow time to let your ideas play out.

We Saw: more spikes to the upside — 

  • All indexes firing on all cylinders
  • Dow teasing with rush toward 30,000
  • Big tech falling slightly out of favor

We’re Watching: all the energy this bull run presents —

  • Tech sector still a favorite in this house
  • Playing the run with an eye for a pullback
  • Setups in: CRWD, NFLX, UNH, TTD, AMD

Does it make sense to “see” price moves before they happen? Learn about catching “pops and drops” in a volatile market.