Why this bull market just won’t quit, plus what Cryptocurrency history tells us is coming next

By Jani Ziedins | End of Day Analysis

May 07

Free After-Hours Analysis: 

After a few weeks of flirting with 4,200, the S&P 500 finally smashed through this psychological barrier Friday.

The monthly employment report missed expectations by a country mile Friday morning, but not only did the shockingly poor employment fail to spook the investors, it caused them to flood in and start bidding up prices.

As paradoxical as this seems, this remains a stimulus-fueled bull market and lethargic employment promises to keep the government spigots flowing at full speed.

No doubt there will be consequences for all of this money printing, but that is a problem for another day. Today, let the good times roll.

Stick with what has been working and that is holding for higher prices. As I wrote Monday following a modest bounce :

[T]his mixed day still favors the bulls. If this rally was truly overvalued and fragile, Friday’s selling would have accelerated, not stalled and bounced. Until we see a more compelling warning, keep holding for higher prices and lifting our trailing stops.

More than 100 points later and this is still as true now as it was then.

There is an interesting divergence developing in the Crypto markets. Until recently, Bitcoin was the only place to be. Bitcoin surged from under $10k late last year to more than $60k earlier this year, leaving all of the altcoins for dead. But then a switch flipped as Bitcoin stalled near $60k and all of the copycats started popping, including the most famous meme coin, Dogecoin.

This resurgence of the altcoins has set off a treasure hunt as speculators chase the next Dogecoin.

The problem for Bitcoin (and all the other cryptos) is this rapidly widening net is diluting the money available to drive any individual crypto higher.

Those of us that have been doing this for more than a few months remember Bitcoin’s last peak back in 2017. Coincidentally enough, that top coincided with a similar explosion of altcoins. Fewer dollars chasing more coins means less demand for each individual coin. Less demand = lower prices.

Will this flood of altcoins end any differently? Only time will tell, but only a fool believes “this time is different”.

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.