The market breadth is still going strong despite the complacency shown up in AAII as you pointed out :) There is no sign of reversal yet despite the overbought and overextended market.
Managing the position (lock in profit) in this extended market is the priority.
Need to stay vigilant with sentiment getting stretched but breadth still good here.
Agree no harm in taking profits along the way. I also like to leave a small runner as long as longer-term MA's not violated (I've been using the 65-day EMA). That works well in strong trending markets.
I will likely take off my short term positions in the first two weeks of January and take my trading size down in half. I don’t think we seen enough yet to really pull back on the long side though. Could be a further extension through January but I believe we have an increasing chance for some nice volatility over next few weeks. I like to think as clearheaded as possible when the markets pick it up a few notches, potentially.
Appreciate the comments! At some point we will have a pullback, and I tend to agree with your timeframe. Can't keep going forever. But at this point I'm expecting pullbacks to be relatively shallow like the 3-5% variety.
The market breadth is still going strong despite the complacency shown up in AAII as you pointed out :) There is no sign of reversal yet despite the overbought and overextended market.
Managing the position (lock in profit) in this extended market is the priority.
Need to stay vigilant with sentiment getting stretched but breadth still good here.
Agree no harm in taking profits along the way. I also like to leave a small runner as long as longer-term MA's not violated (I've been using the 65-day EMA). That works well in strong trending markets.
Markets will correct when least suspect. I agree this can last into 2024, it's better to prepare than predict.
Yes read and react to the markets as they evolve!
Another great post, just wanted to wish you a Happy 2024. It's been great to get connected on substack and reading your excellent work.
Thanks, Amrita!
I'm grateful we were able to connect as well. Keep putting out the great content, and Happy New Year!
I will likely take off my short term positions in the first two weeks of January and take my trading size down in half. I don’t think we seen enough yet to really pull back on the long side though. Could be a further extension through January but I believe we have an increasing chance for some nice volatility over next few weeks. I like to think as clearheaded as possible when the markets pick it up a few notches, potentially.
Great write up.
Appreciate the comments! At some point we will have a pullback, and I tend to agree with your timeframe. Can't keep going forever. But at this point I'm expecting pullbacks to be relatively shallow like the 3-5% variety.