Can The CPI Pump Sustain? Or Is It A Bull Trap?
When the CPI numbers came in this morning, all markets, including stocks in pre-market went absolutely crazy. Before that, Bitcoin was looking weak and was heading back in the southern direction as far as price is concerned until the report came out and WHAM!
The question is, can this pump sustain? Is there enough positive momentum in the markets to keep the pump running? Or, is this a bull trap and we are looking for further downside in the markets?
Looking At The SPY
The S&P 500 took a rocket shot as the major tech stocks had a huge run in pre-market and at the market open, but is starting to top off in the short term.
What it looks like on a technical level is that the markets are trying to lift back to a key level so the key is to watch how they are going to react once they reach those key levels. According to the market cipher indicator is showing s slowing of momentum and a possible topping of this run.
It's important after a hot move like this to take a broader look at the markets and the macro outlooks of what is going on. With Meta laying off 11,000 employees as well as the crazy fiasco with Elon and Twitter, the economy hasn't been in good shape, so that leads us to believe that this pump will not sustain itself.
Watch Our For Traps
Bull traps are basically market corrections in a down trend that traps traders in a bull move, then price reverses and does the other way, which gets those long traders stuck in the trade. This is when stop losses start to get hit, which then increases the downward pressure. If they don't have stop losses set, they can be in for a bad day.
These are moves you have to be careful trading. If you are long in one of these moves, you have to recognize quickly if and when it is turning, and then you just need to cut and run. These are also good opportunities that if you can spot them, you can turn around and play it on the way back down after you confirm the move of course.
A move like this in Bitcoin would confirm the bull trap. so when you see it start to consolidate and turn the other way, it's time to look at either getting out of the bullish trade so you are not trapped or look to go bearish. You just have to wait, be patient, and wait on confirmation.
Don't Get Caught Into FOMO
Fear of missing out is a huge downfall of many traders. You see a move happening and you are not apart of it, and when you get the chance to get in, the move starts to top out and or go the other way and you end up losing, just about every single time.
Trading markets are like the ocean, it moves in waves, so if you miss the boat, just wait for it to come back then jump on for the next run. You just have to wait and learn when the best time to hop aboard the vessel would be. If you try to jump on too early, you can end up wet real quick, too late, same result...
Stay Sharp, Be Patient, And Trade Well
In markets like this, it's best to not give into the quick FOMO, but to sit back, see how the markets are going to react, then make your move from there. Patience in trading is a must-have quality. Not all traders have it, but with enough discipline, and money lost, you can learn.
Keep your mind sharp, your body healthy, and your diet clean. These are great ways to keep yourself in tip-top condition so when you are trading, you are going to be in a much clearer space to make the right decisions for your trade and your business.
Nothing said is financial advice.
This is for educational and recreational purposes only!
Stay safe in these volatile markets and don’t get rekt!
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