Be Cautious When Everything Looks Bullish — The Subtle Warning Signs of Market Complacency
A timely guide for young investors learning to see through market euphoria and prepare for reversals — without becoming perma-bears.
“When everyone’s celebrating, it might be time to check the exits.”
The Setup: When the Market Looks Too Good to Fail
There’s a reason seasoned investors often become cautious when the media turns euphoric, the charts are vertical, and sentiment seems unstoppable. That’s usually when risk is hiding in plain sight.
A powerful example? Alphabet (Google) from late 2024 into early 2025.
Let’s break it down.
Google’s Breakout — And What Came After
Alphabet (GOOGL) reached its all-time high on July 10, 2024, at $192.62. Don’t Bet Against the Market Just Because It’s Bullish
Being cautious doesn’t mean you must go short. It just means you stay alert. You:
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Avoid chasing extended moves
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Take partial profits when appropriate
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Tighten risk on overbought names
2. Watch for Triggers — Not Just Vibes
Earnings gaps, failed breakouts, or key support breaks are actionable triggers — not just opinions.
3. Use the Five-Bar Rule
As we’ve said before:
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Wait five daily closes after a news event
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See if the market holds the level or fails to rebound
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Enter only if price action confirms your idea
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