Stocks Continue to Push Higher, Crypto Currencies Breakout
As the Federal Reserve continues to pump free liquidity into the financial markets, stocks have continued to push higher and higher. The free liquidity appears to be a constant for this market until inflation hits the Federal Reserve’s 3% target. While this does not guarantee all-time highs, it does help provide an artificial floor for the stock market. Crypto currencies have enjoyed the free liquidity as investors continue to accumulate digital currencies. These currencies are a hedge against paper money and are moving nicely. Bulls remain the dominate group and given the market’s rise it comes as no surprise. We will continue to operate as normal with continued focus on risk management. There is no need to push the envelope, but also no need to miss out on gains. Stay disciplined.
Bitcoin is grabbing headlines with its move above 23,000. Given the statements from the Federal Reserve yesterday traders are simply hedging against runaway inflation. Pumping so much liquidity into financial markets will have a consequence. When? Anyone’s best guess and why it is important to have a sound risk management strategy. Stocks do well during inflationary periods. ETHUSD and LTCUSD are enjoying nice moves as well. Following the lead of BTCUSD, but both Crypto currencies are enjoying gains.
Stock Market Sentiment remains slanted towards the Bulls camp. Although dropping on the week AAII Bulls dropped to 43.43%. Bears edged lower to 26.29%. It appears the crowd is not willing to give up on the uptrend just yet but are not seeing the market lower either. We will stay on the trend if possible until our rules tell us to get out. There is too much money left on the table by getting out too early simply because you think it possible cannot go higher. The opposite is true too. Opinions are not worth much to this market and those who are successful know to act on price rather than opinion/emotion.
We hope you have had a fruitful week of trading. No matter what kind of market we have there is always opportunity all around us. If you are willing to put in the work, you will find it. Stay disciplined and always keep your losses contained.
