This week feels like a crossroads between momentum and prudence. With gold above $4,000, a looming Fed speech, and a government shutdown dragging on, traders should rethink aggressive long positions in overextended tech and AI names — valuations are rich, and sentiment borders on euphoric. It may be time to trim gains or hedge exposure, especially in speculative growth sectors.
Instead, consider rotating into defensives (utilities, staples) and quality cyclicals that benefit from a softer dollar or policy easing later in Q4. Short-term traders might also revisit their leveraged bets — volatility could spike if Powell’s tone surprises hawkish.
Overall, the setup suggests tactical caution rather than full retreat: protect profits, tighten stops, and wait for confirmation before chasing breakouts.
My week in one word: Unsettling.
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