Markets should be treated the same way – innocent until proven guilty. That means giving the benefit of the doubt to the prevailing trend until price clearly proves otherwise.

Bias should come from structure, not emotion.

Context determines the decision

The same market can offer different opportunities depending on your timeframe.

• Day traders may find opportunities even in stretched conditions
• Swing traders must define risk carefully and accept reduced upside
• Investors should wait for pullbacks and buy strength afterward

Timeframe defines responsibility.

Stretch does not equal bearish

A market can feel extended without being broken. That distinction matters.

• Short-term pullbacks do not negate strong trends
• Being below a declining 5-day moving average is not enough to turn bearish
• Longer-term trends carry more weight

Reacting too quickly often means fighting the primary trend.

Important note

The weekly chart often tells the clearest story. When weekly trends are powerfully bullish, it takes significant evidence to justify a bearish stance.

Strong trends deserve respect.

Buying strength after pullbacks

For longer-term participants, patience is part of the edge.

• Wait for pullbacks within the trend
• Look for renewed strength before committing capital
• Avoid chasing when conditions feel stretched

This approach keeps traders aligned with momentum while managing risk.

Caution

Getting bearish simply because price pauses or pulls back can lead to missed opportunities. Trends end when they are proven wrong – not when they feel uncomfortable.

The takeaway

• Treat markets as innocent until proven guilty
• Let structure guide bias, not emotion
• Respect powerful longer-term trends
• Adjust decisions based on timeframe

When the evidence changes, adjust. Until then, respect the trend.