All-Time Highs Keep Coming: Here's How to Trade Them
Why It Matters
The approach equips traders with a practical framework to profit from relentless market highs while mitigating risk in a low‑volatility environment, preserving capital for sustained bullish trends.
Key Takeaways
- •Markets set seven all‑time highs in first ten trading days of May.
- •Traditional pullbacks to daily 21‑EMA are absent; faster averages dominate.
- •Use daily 5‑EMA/8‑EMA on 30‑minute charts for entry points.
- •Look for 30‑minute squeeze near rising daily 5‑EMA for short‑term trades.
- •Cheap puts or XSP butterflies can hedge long exposure in low‑volatility environment.
Summary
Heather opens by noting that the S&P 500 has logged seven new all‑time highs in just ten trading days of May, while red‑day closes remain scarce. She points out that the market’s usual pullback to the 21‑day EMA has vanished, forcing traders to rely on faster moving averages—specifically the daily 5‑EMA and 8‑EMA—when charting intraday price action. The core of her strategy is to watch 30‑minute charts for a tight Bollinger‑style squeeze that coincides with a pullback to the rising daily 5‑EMA. When both conditions align, she recommends entering short‑duration options or calls, targeting expirations three to four days out, often on Fridays, to capture the next upward leg. She illustrates the method with recent moves in Walmart, LUNR, Nvidia, Micron and Riot, highlighting how each stock either bounced off the daily 5‑EMA or formed a 30‑minute squeeze before surging. Heather also stresses that low VIX levels make puts inexpensive, suggesting cheap hedges such as XSP butterflies to protect long portfolios without committing large capital. For traders, the takeaway is clear: in a market that repeatedly breaks new highs, traditional swing‑trade pullbacks are rare, so success hinges on tighter time‑frames, faster averages, and opportunistic, low‑risk hedges to manage downside while riding the rally.
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