Of course, they were going to buy that first dip off of the SPX 2665 high. Same thing they've been doing all year. Plus its December, a bad time to short. The dip buyers came out of in bunches, protecting 2625 level and grinding the market back up. As I have stated before, I will only take perfect short setups, and a move back to 2660 this week will not be a perfect short setup. There is a big difference shorting a euphoric gap up into new highs on good news (high probability trade) and shorting the same level coming up from a short pullback with no news (a coin flip).
Market participants have turned their focus away from the stock market towards bitcoin. It really shows you that there are a lot of loud market observers, but not a lot of loud market participants. Its like you have a few people in a casino playing baccarat and a bunch of people watching those people gamble. If I had no plans on trading bitcoin, I wouldn't pay any attention to it. But I am very interested in getting involved on the short side in the future so I have been watching the action from afar, waiting for the CME opening on bitcoin futures and also bitcoin ETFs to possibly short.
I will not play the long side in bitcoin, because I don't like to trade with a short term view. I want to be able to hold my position long term, and that is something I refuse to do long bitcoin. The bitcoin longs will have their profits front loaded in this parabolic rise higher, so if you are going to be long, you have to be long on the way up, not when it is consolidating. Those looking to buy a bitcoin pullback are the ones who will be absorbing the risk. Whenever there is a pullback, there is always a risk that the uptrend is over, and prices keep heading lower towards its intrinsic value, close to zero.
I am on the sidelines here and probably not doing much for the rest of the year in S&P futures. Bonds are trading in a tight range, and not that interesting either. No wonder they are talking about bitcoin, there is no action anywhere else.
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2 comments:
Dont short bitcoin. That is my advice to you. Unless you just want to teach english.
I am in no rush to short bitcoin but I see the top happening in 2018. Just a matter of early 2018 or mid 2018. And I won't be going all in, of course. My advice to you: dont buy bitcoin.
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