Distribution Continues to Hit the Market
During the first week of 2022, the market has continued to show signs of distribution as it did in December of 2021. FFTY and IWM are now both below their 200-day moving averages, which is not a good sign for growth. In addition, mega-cap leaders MSFT and GOOGL are also starting to show weakness as is the QQQ. Remember, in a deep correction, even the most beloved stocks get hit. I had been monitoring APP, DDOG, and NVDA for potential entry points in case the market started to exhibit signs of strength, but these stocks all failed to even approach potential buy points. While I still believe these stocks may go on strong moves in 2022, this is clearly not a time to be a hero.
There seems to be a lot of complacency here with the S&P 500 not too far from all-time highs. The VIX may have to spike higher before we get a sustained bottom.
Crypto has also been hit recently with Bitcoin now below its' 200-day moving average. While I am still extremely bullish on Bitcoin and Ether long-term, this is clearly a time where they are basing and not a time to be aggressive. I will continue to monitor major resistance levels to see if a buy point develops. Until then, I'm content to wait it out.
The key is to play great defense here. Save your emotional, mental, and financial capital for better times. Remember, cash is a position and keep your buys small until you start to gain traction. The sun will rise tomorrow, and we will see major uptrends in crypto and growth once again. It just may take some time for bases to build.
Risk right. Sit tight.
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