I'm going to continue reinforcing some of the same points over and over again because I think they are incredibly important. The following bullet points could apply to people who are long Bitcoin, gold, gold mining stocks, or even the S&P 500 right now (all markets in strong uptrends):

  • Bull markets climb a wall of worry and if you turn on the TV or look at Twitter or talk to people in investment chat forums you'll literally find 189 reasons to sell something that's been going up recently.
  • Markets don't move in straight lines, at least not for very long.
  • Bull markets are built on bullish sentiment. In other words, for a market to rise significantly it needs more buyers, new buyers, and increased enthusiasm among market participants. Bullish sentiment is NOT bearish. Crazy euphoric bubble sentiment IS BEARISH because it means all the potential marginal new buyers are already in the market, who else is left? (think crypto in January 2018 OR tech stocks in December 1999).
  • In a strong bull market trend sentiment will reach extreme bullish levels and then moderate to neutral territory. Similarly the Relative Strength Index (RSI) will often reach "overbought" territory above 70 or 80 and then pull back near the median line (50) during corrections/dips.
  • Strong bullish trends will have corrective phases that work off overbought/overbullish conditions. These corrective phases usually occur via time, not price (although they can occur through both).
  • Every few months the conviction of bulls will be tested, often by sharp, violent corrections. Those with stops that are too tight will get shaken out during these periods. Inevitably, the bull market will resume and those who had the ability to step in and buy near the point of maximum pessimism will profit.

The Daily Sentiment Index (DSI) for gold reached 94 roughly two weeks ago when the gold price was ~$1410, as of yesterday's close the DSI had moderated to 66 and the gold price was around $1400. This is evidence of a 'correction' mostly through time, not price. This is bull market behavior. 

Gold (Daily - Year To Date)

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