Here we go again.
Yesterday, we had another green day on Wall Street, and this time the CPI gets all the credit.
Tuesday morning’s inflation report came in just a hair under expectations. Not a blowout, but enough to kick off a rally across the board. The Nasdaq jumped, SPY followed, and suddenly traders who were anxious last week are now wondering if they’ve missed the boat.
Let me just say this:
One soft CPI print does not mean the market is overbought.
In fact, one of the biggest mistakes I see during runs like this is when traders try to outsmart momentum. They’ll look at a few big green candles and say, “That’s it. We’ve gone too far. It’s time to buy puts.”
But most of the time? That kind of thinking just gets you sidelined.
I’m not in that camp.
I believe in staying aggressive until the market gives you a reason not to be. You don’t want to be the person calling tops all the way through a 10 or 20% rally. You definitely don’t want to be the trader waiting for the other shoe to drop from Covid back in 2020… I know folks who tried to pick tops for a year straight while the market moved 100% higher.
Timing reversals is nearly impossible, and unless you’ve got a crystal ball, you’re usually better off riding the strength and adjusting when it actually changes—not when it just “feels overdone.”
Heck, just throw a 20 EMA on your daily chart so you have something to look at. And don’t buy puts when we’re above it. That way you don’t get caught in the loop of trying to fight higher highs.
And data supports that stance. Just look at the Fear & Greed Index. A month ago, we were sitting in extreme fear. Today? It’s flashing greed with a reading of 70.
That’s a major sentiment shift—and that kind of whiplash doesn’t usually signal a top. It usually means traders are still playing catch-up… which often fuels the next leg higher.
Especially when insider buying is only just now beginning to pick up…
That is a lot of money on the sidelines still left to deploy, and some liquidity on top of a “frenzy” could push us higher.
Now, obviously, I am not saying that I think this is going to be smooth sailing to new highs. We’ll have some shakes for sure.
But the big takeaway is the same one I tried to give you when the market was 10% lower than it is now: You don’t want to miss out on the best windows of the market by getting kicked to the sidelines near the lows.
You’ve probably heard me say it a million times: I am a net bullish trader simply because I believe the market will go up over time more often than it goes down.
And the last few weeks are a good example of why.
We’ve hit 6 out of 6 on Automated Options since I mentioned getting back in on the upside. I’d say that’s bullish!
And here’s something else really cool:
My Two Way Trade strategy hasalso closed winners on this upswing. The strategy is designed to protect us during downside flushes, but it works just as well when the market is ripping higher.
So if you think, like I do, that the market is likely going to squeeze higher here – while seeing some aggressive shakeouts at any time – it’s a pretty cool strategy to have because it’s intended to win in both scenarios.
You can check out the Two Way Option Trade here.
Whether you use my strategies or not, the key takeaway is not that the market is definitely going up. I am bold but not that bold.
The takeaway is that just because it’s gone up a lot and fast does not mean it’s going to turn around today, tomorrow, next week, or next month.
It’s those exact windows where the market massively overperforms that traders look back and say “Oh geez, if I was just trading aggressively. Look at all the opportunities!!”
Why do they miss it?
Because during that opportunity, they were saying “Oh geez, this market sure looks overextended.”
So, just to be clear, my advice isn’t to time any one moment during a rally like this and certainly not to go “all in” because of FOMO…
My advice is to not sit out during rallies just because the market looks “too green”.
Sure, the shakeouts we’re all worried about will come. They always do.
But the opportunity comes from being consistent—not perfect.
We’ve still got room to run—and a lot of ways to take advantage of it.
— Nate Tucci
