The rebound fluctuated between small gains and losses on Monday, finally ending 0.09% in the green.

While 0.09% is generally nothing out of the ordinary, adding to Friday’s flirtation with 4,700 and ultimately closing above that psychological level is certainly significant.

Such a record close would have been impossible to imagine just a few weeks ago, when the index threatened to break through the support at 4,300. We have come a long way from those lows and even more impressive is the incredibly short time it takes. took us to get here.

As frightening as these heights may seem, the market continues to trade well. We’ve been solidly overbought for weeks, but buyers continue to throw in more money at these all-time highs.

Monday afternoon saw a small swing in the red and that counts as a test for the market. If that bounce is brittle, all it takes is a small crack to break things up. But so far, things are holding up. Now an afternoon doesn’t mean we’re clear. In fact, what happened on Monday is much less important than what is to come on Tuesday and Wednesday. That said, a good day on Monday is certainly better than a bad day.

If nervous owners start taking a profit, this sale could feed on itself and bring the index back to 4,600 and even 4,550 are on the table. While a pullback to support is a very normal and healthy thing to do, it would seem shocking given how effortless the climb to these levels has been.

Or buyers could keep throwing money into this market and we have only seen the beginning of the silliness.

At this point, either outcome is likely and trading is just a matter of waiting for sentiment to switch. We’re arguably close to the next routine setback, but the same could have been said last week and the week before.

We are trading the market that is given to us and although it will eventually consolidate those gains, it is not going down yet and that is how we have to trade it. As frightening as it may sound, there is nothing else we can do but hold and lift our stops.

If a person is paranoid, there is nothing wrong with taking profits from the table. It was a great race and we only make money when we sell our winners. Take part of your position off the table and let part roll. Sometimes it is enough to reap the benefits to sleep better.

The elevator stops at the lower / middle 4,600 and see where it goes.

Tesla (NASDAQ 🙂 fell after Twitter told Elon to sell 10% of his TSLA shares. Some owners panicked.

They dumped their stocks in anticipation of this impending oversupply. That said, the instinctive sell was fleeting and prices quickly rebounded above those early lows.

There are many reasons to sell this stock, but Elon selling a fraction of his holdings is not one of them. While an academic with his pocket protector and calculator will tell us one thing, given the absurd ratings of this action, TSLA has been years since heeding an academic’s advice.

This is a momentum trade and the momentum is even higher. Use Monday morning lows as a stop and anything above that level is tenable / buyable.

If we’re dumped, that’s okay. Be happy to lock in those profits and get ready to buy the next bounce, probably around $ 1,000.

Of course, the stock might not even sell and that is why we continue to hold until our trailing stops are reached. (Most nervous owners bailed out hundreds of dollars ago.)