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Appetite comes with eating. The greed and risk-on behavior comes with higher prices. We saw another week of epic short squeezes. Tesla (TSLA) has come within 7 points from the proverbial $420 “going-private” level that Elon Musk joked about on Twitter last year. Shopify (SHOP) is back near its all-time highs after a 30% drawdown and a test of its 200-day moving average just a month ago. Analysts waited for Nvidia (NVDA) to go up 15% in two weeks to start upgrading it confirming the popular Wall Street saying that “you don’t need analysts in a bull market and you don’t want them in a bear market”. Even Netflix (NFLX) had a big rally and it gained 10% in a week. It is now above its 200-day moving average and back near potential resistance.
The one thing many forget about bull markets is that not all stocks go up at the same time and there are constant sector rotation. Individual stocks can easily have a 30% drawdown in a bull market while the indexes remain in a range and go up. Be careful what you chase and if you do it, have an exit strategy.
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