Let’s talk about a potential melt-up — and why I’m cautiously bullish.
Right now, we’re in one of those indecisive market phases where price action isn’t giving us a strong signal one way or another. We’ve seen some pullbacks here and there, but nothing that’s really shaken up the overall trend.
The market is sinking a bit today but still hovering near its highs, and while we haven’t seen a big move, I’m still leaning bullish for a potential melt-up.
But — and this is key — I’m not about to go all in just yet…
In these kinds of environments, it’s easy to get sucked into the allure of a melt-up, where everything just keeps climbing without much of a pullback. And hey, if we get that, great!
But my preference is always to wait for a more strategic entry point. I’d love to see some kind of retracement, especially on the major indices like the S&P 500 or Nasdaq, to give me a better risk-reward setup.
If we don’t get that pullback and the market just continues to grind higher, I’m happy to sit on the sidelines with cash ready to deploy when the right opportunity arises.
It’s always important not to chase a runaway market — because that’s when you get into trouble.
You end up buying at inflated levels and, when the inevitable correction hits, you’re left scrambling to recover.
What I’m watching closely is the 50-, 100- and 200-day moving averages on the Dow, S&P 500 and Russell 2000. If we get any pullback that brings price down to those support levels, I’m looking to add exposure — whether through credit spreads, debit spreads, or even outright stock purchases.
But if the melt-up continues without a dip, I’ll let the market run and wait for it to come back down to more attractive levels.
Volatility has been ticking up slightly, with the VIX hovering just under 20 on Wednesday, but nothing too alarming yet.
Small caps, as represented by the Russell 2000, have been more volatile, pulling back 2-3% from recent highs. That’s where I’d like to see more action — if we get a deeper pullback in the Russell to around 5-6%, I’m jumping in with some IWM or RTY (Russell 2000 futures) exposure.
Overall, my strategy remains simple…
Stay cautiously bullish, don’t chase the melt-up, and be patient for the right setup.
If we see a pullback, I’ll be ready to deploy cash into solid opportunities. But if the market wants to keep climbing without giving us a chance to reload, I’m content sitting back and letting it run for now.
Patience is key in these moments — don’t let FOMO guide your trades. Wait for the market to give you what you want, not the other way around.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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