The most difficult thing with the markets is not to take sides, even the rational one, and to never push against the current sentiment, however idiotic it may be.
These three popular movies about “the insides of the financial markets” have conditioned lots of people in a wrong way, by presenting a naive, grossly oversimplified, but “seemingly fair” view, and distorted one’s perception of reality. Yes, these are all ponzis and yes, the market participants “have to do something” to earn their living, and institutions to roll on, until they become Lehman Brothers.
So, if the market participants feel that at the obvious, textbook-like double top there are valid reasons to buy it massively, what can we do? Just sit and watch. Some of these people even understands the irrationality and danger of such decisions, but as long as they themselves won’t be held accountable if “something goes wrong”, why not to buy the top and feel euphoric for a couple of hours? They are buying it with other people’s money anyway.
So, instread of a correction, which is long overdue, we have another “leg up”, almost vertical, which suggests a strong manipulative move (like coordinated institutional buy orders).
The smartest people does not reflect upon which direction the market moves. They just understand and react. Yes, nowadays institutions are crushing naive Michael Burries and the top-calling wannabes, who are trying (honesly and desperately) to time the market, just like “smart people” in the movies.
Instead, one has to realize that if a wast majority or the lagers institutions involved “decided” that the line shall continue to go up, then it goes up, indeed. Yes, shorting the top is a dream, especially given that once it finally begin to crash, it will move fast and violent, so no good entry will be possible and both “falling knife cathers” and “leveraged bobos” will be liquidated in minutes.
Anyway, the most difficult lesson is not to be a “good guy betting on collapse of the ponzi scheme”, as in the movies. It is a ponzi, it will collapse, the degens who are buying the top are degens, no doubt about that, but one must not yell at the weather or feel “betrayed” or anything of this sort.
Today the market, dominated by idiots who believe in a “getting rich quickly schemes” (by just buying and hodling lmao) decided that it is smart to “buy more”, pushing their averages up, taking very serious risk of becoming bagholders who bought the top in just a couple of days, and even never seeing it above 100k ever again. But these are “rational risk assessments”, based on what happened before. This time, of course, it will be different and the line will go up forever and no more corrections – the new paradigm!
So be it, let the chips fall where they may. It is time to try to sort ATHs with the smalles possible positions (which will be stop-loss’ed again and again, losing money one can easily afford to lose while trying to get a golden entry, without even getting emotional about what is going on. Yes, degens continue to aggressively buying the top, even at an ATH. Okay. Never try to argue with them or “prove” oneself “right”. There is no other way.