Hey, Ross here:
And let’s start the middle of the trading week with yet another actionable trade idea.
Chart of the Day
This is Grayscale’s Ethereum ETF, ETHE – and it is showing strength similar to Bitcoin.
Notice how ETHE closed below the 21-day exponential moving average (yellow line on chart) on August 1st. It came right to previous resistance and bounced hard on high volume the very next day.
This is what I want to see – aggressive buyers taking advantage of temporary price drops.
On top of that, the 21-day moving average also served as effective support during yesterday’s drop – another good sign.
I took a position in this stock last week. I want to see it hold above $10.75.
Insight of the Day
Trading and investing is emotional – which is why traders and investors have short memories.
The S&P 500 has pulled back by about 4% from the highs in late July.
That’s the steepest pullback we’ve seen in five months – so it’s no surprise why there’s all this market anxiety floating around.
Yet, the pullback from February–March this year was about 8% – double what we’re seeing now.
But many people have forgotten what it felt like to go through that pullback. They only remember the exuberance from the subsequent bull run – and are comparing that to how they feel now.
You want to be able to zoom out and look at the bigger picture.
Longer-term consolidations like this are normal – as are rotations in market leadership.
The bull market is still in effect. We just have to be a little patient.
As new market leadership emerges, the big opportunities will come.
Embrace the surge,
Editor, Stock Surge Daily