Today feels the same as it did in late January. I can\u2019t argue in favor of short positions because the momentum is clearly bullish. But the momentum also feels artificial.<\/p>\n
The best similar position I can point to is that of bitcoin. Bitcoin peaked near $20,000 per coin in mid-December. It was a parabolic move higher, one that sucked many investors in from off of the sidelines. And anyone who dared to question the validity of the move was scolded as a nutcase.<\/p>\n
Then, bitcoin lost 50% of its value almost overnight. It erased most of December\u2019s parabolic move. And, even though Bitcoin was still trading 200% higher than where it was six months earlier, the bears claimed victory.<\/p>\n
Then, bitcoin rallied back up to $16,000. It silenced the bears and it re-energized the bulls.<\/p>\n
That\u2019s when it suffered a more significant decline. Bitcoin dipped below $7,000 in early February. It reached oversold conditions. And it set the stage for a more sustainable bounce off of the lows.<\/p>\n
Today, bitcoin trades for about $10,000. If you bought on the initial rebound from the parabolic move then you\u2019re likely still way down on the trade. But, if you bought into the oversold conditions that followed the second decline, then you\u2019re sitting on a nice profit.<\/p>\n
That\u2019s the pattern I expect to play out with the S&P 500.<\/p>\n
The index reached a parabolic top in January. I was early identifying it. Nobody on CNBC was talking about it. And, many subscribers were plenty ticked-off with me<\/a> for not being aggressively long stocks as the market pressed higher in January.<\/p>\n They were less ticked-off in early February.<\/p>\n Now, though, we\u2019re in that same situation. Stocks are pressing higher in an unconventional move. Everybody on CNBC is talking about a \u201cV\u201d recovery where they expect stocks to rally to new all-time highs. The selloff from a parabolic top was an anomaly.<\/p>\n This looks a lot like the bitcoin rally from $10,000 to $16,000 in early January. The bears have been silenced. The bulls are re-energized.<\/p>\n I\u2019m not looking to add short exposure here. The momentum is too strong to justify it. But I\u2019m sure as heck not going to tell you to buy stocks into this setup.<\/p>\n The computers are running the show. Investor sentiment is now wildly bullish. And nobody is looking at the risk.<\/p>\n This is exactly the same situation we had in late January.<\/p>\n The S&P can certainly press higher from here. 2800 looks like a reasonable target from this level. But there\u2019s so much more risk than seems evident from current conditions. I think the higher-odds bet is on the downside.<\/p>\n Most folks should steer clear from any new positions right here. Aggressive traders should look to short into overbought conditions as the S&P 500 approaches 2800.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n P.S. <\/strong>Each week in the Delta Report<\/em>, I send trades to my subscribers based on a simple principle: The reward must outweigh the risk. That way, no matter what\u2019s going on in the market each week, my readers stand to profit.<\/p>\n And right now, conditions are lining up to produce some of the most exciting trade setups I\u2019ve seen in my career.<\/p>\n To learn more about a Delta Report<\/em> subscription, and the techniques I use to find these trades for my readers, click here<\/a>.<\/p>\n Today, kind words from Market Minute<\/em> fans\u2026<\/p>\n Hi Jeff! I’m a technical trader as are you. We often have similar opinions often for somewhat different reasons. Trading is a very personal thing.<\/p>\n I really enjoy receiving your Market Minute<\/em> and take the time to read it. I was wondering why, in your opinion, it is so popular for folks to be making those long videos to make some point. Some, like me, rarely want to spend the time watching them. For me, I seldom take the time to do what I’m doing at this moment.<\/p>\n Thanks again for your insight.<\/p>\n \u2013 Dennis <\/strong><\/p>\n<\/blockquote>\n <\/p>\n I am really having a good education reading your Market Minute<\/em> every day. It seems that your customers make good money by trading options because of your guidance.<\/p>\n \u2013 Somsay <\/strong><\/p>\n<\/blockquote>\n What have you learned reading the Market Minute<\/em>? Have you made any trades based on Jeff\u2019s morning analyses?<\/p>\n Let us know\u2026 and send any other questions, suggestions, or stories\u2026 right here<\/a>.<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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