By examining the past trends of the market, one can always find a similar signal trajectory: After many major positive developments, the market often oscillates sideways at a high level before ultimately forming a 'gate pattern'. Examples from the past include Musk's announcement of Tesla entering BTC, or key mentions of blockchain, and more recent news like Trump stating on his personal platform that 'mainstream varieties may become national reserves', all of which have shown such hot-then-cold trends.
In a bull market, the most perplexing question is whether to 'cash in on the good news or hold on'—after all, not all positive news is a 'one-time deal', some will continue to release momentum. Just like this time, Powell released a positive signal for interest rate cuts, which the market can interpret as a sustained positive development paving the way for a September rate cut; in this case, the 'sell the news' strategy could easily lead to missing out.
However, when the price clearly shows a 'sharp rise followed by a drop', especially after breaking new highs under the impetus of positive news but quickly falling back to a key support level, this 'transition from euphoria to calm' is a critical point at which one should break free from the inertia of thinking 'the good news will continue' and be wary of the possibility of a major peak. Rather than getting entangled in whether there will be more good news to follow, it is better to focus on the real feedback given by the market: this rhythm of 'rising first then suppressing after the good news is fully priced in' is often a warning of deep corrections, and at this point, one should be ready to manage risks rather than blindly chase after bullish trends.
