What the S&P 500 is telling us it wants to do next. Plus Bitcoin holders, what are you doing?

By Jani Ziedins | End of Day Analysis

Jan 04

Free After-Hours Analysis: 

Tuesday was a mixed session for the S&P 500 as an early push to record highs fizzled and retreated into the red. While a bearish intraday reversal is never a welcome sight, the index bounced off of those afternoon lows and closed pretty much where Monday left off.

Ties go to the trend and even though the index is struggling with 4,800 resistance, the fact we keep holding near record highs is a win for bulls. Stocks fall from overbought levels fairly quickly and trading at these levels for over a week tells us most owners are fairly comfortable with these prices and few are rushing to lock in profits.

As I often say, a market that refuses to go down will eventually go up. At this point, it is only a matter of time.

Bitcoin is stuck in the mud. $50k’s been a ceiling since early December and this cryptocurrency keeps finding itself falling back to the mid-$40k’s. In a mirror of the equity index’s analysis above, the longer this hold near recent lows, the more likely it is to make new lows.

This was a sell as it fell through $60k support in November and December’s $50k violation was yet another reason to abandon ship. At this rate, we will be saying the same thing about $40k as this trades in the $30k’s.

Remember, only fools hold all the way down. Use trailing stops to protect your profits. It is far easier to buy back in after a bounce than it is to wish something higher after a big pullback.

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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.