And the short squeeze is real.
There were virtually no sellers in the market today. Starting late yesterday we saw a huge infusion of buying in the last 15 mins which was continued overnight and into the early morning today. That continued virtually all day with a bounce off of $312.10. And any selling that did enter the market was again aggressively bought up and if you were short you felt pain all the way until the close getting us up to my target at $313.
Majority of the volume today was buys. Which tells me we're seeing a confluence of short covers, stops, and people chasing the trade. I definitely feel stupid today reducing long exposure yesterday as we hit two of my targets today in SPY at $310, and $313, and one of mine in IWM. We're now at the breakdown candle high from early March and above the historical resistance of $145 on IWM (but we did close below).
We're back to where we were sentiment wise pre COVID where technicals are starting to get washed out by the irrationality of too much liquidity, and everyone trying to find a place to get in. If you need a refresher - dips, pullbacks, and retracements were effectively illegal due to central bank intervention. Now that's going to be even more perverted with all of the fed "support" that's in the market. This market is not normal, and will not act as such. We've essentially given meth to a child. Irrationality and buying the dip will be the name of this game if this continues. I mean, it already has but at least technicals were still some what relevant before we got back up here.
Let's talk bear case: GAPS! We now have one at $302, $294, and then $286. And that's just in this last leg up. Not to mention the huge one we have at $228. I'm not saying we HAVE to come down to fill these. But.. 80% of the time the market wants to at some point. During the COVID sell off we filled something like 6 months worth of gaps in 30 days. Also, and this goes without saying, news flow. Just today we had more China news that the market ignored, interestingly enough. And we should start to feel the real affects of the economic downturn here in the next few weeks with more white collar non service jobs starting to get cut, and also the laws barring companies from firing people start to expire. All bets are off if we start seeing another COVID spike. But again, the market moves and then they pin news to it like 80% of the time. Today CNBC read "Dow up 500 points as investors look to recovery due to reopening" or something along those lines. It's bullshit. we know it. The market is being fueld by fed liquidity and risk taking that normally wouldn't be executed due to the market thinking the fed has their back no matter what. There are people out there that literally think the fed will start buying stocks if we have another extreme downturn. This is essentially just corporate socialism and is appaling in my opinon. But that's another conversation. I honestly feel like we're in prime rug pull area anywhere up here just because we have a high retail participation on the buy side, as well as a lot of funds being squeezed out of their short positions. Once that's complete, the hammer drops and retail is left holding the bag, and the funds that were positioned correctly are now chasing the trade.
Bull case: Fed funded market meth. Buying begets buying. This now has started to pick up momentum. We're now within a couple good days of another ATH. The NDX is there now. Without anything the market finds catastrophic the cognitive dissonance will remain and we may even see $350/3500 by mid summer. Crazy right? This market is seemingly bulletproof and it will take a linebacker shot to the knees in order to send us back down to the lows from March, any dip or pullback will most likely be reversed quickly and aggressively with everyone trying to chase the trade and FOMO really starting to set in. I mean, we could honestly be back at ATH's by next week. Everything on the charts points to higher prices. Oh, and not to mention we still have ONE more gap to fill. Next targets would be $324, and then $333.
Check that huge infusion of buying in the 5 min candle at 1 P.M EST effectively setting the market direction till close. No news i could find for it, 1.2m shares. Also $312.10 coming into play as an important number
Above historical Megaphone top trendline
Same with SPX
Still haven't popped the RSI divergence from $2750 though
If we don't reverse from here it's bascially curtains for the bears
IWM on another tear, but bleeding some of that strength into close as SPY rallied. Closing below historical resistance marginally
Closer look
VIX finally confirming bear capitulation
This is insane to me
DJI target hit (100 period MA) - has to close above it tomorrow to confirm trend
Silver, gold, and bonds all absolutely confirming a risk on rally
And the 10 yr actually getting the most meaningful movement it's had in a long time
Look out for these haven moves being fakeouts. It could just be a liquidity hunt before moves back into their ranges. Everyone is looking for a place to stash money right now.
Net net looks like the recession was cancelled in the markets eyes and it will behave as such. Watch for rug pulls. Stay safe and happy trading.
This is not trading advice, this is my own personal opinion based on my own personal TA.
There were virtually no sellers in the market today. Starting late yesterday we saw a huge infusion of buying in the last 15 mins which was continued overnight and into the early morning today. That continued virtually all day with a bounce off of $312.10. And any selling that did enter the market was again aggressively bought up and if you were short you felt pain all the way until the close getting us up to my target at $313.
Majority of the volume today was buys. Which tells me we're seeing a confluence of short covers, stops, and people chasing the trade. I definitely feel stupid today reducing long exposure yesterday as we hit two of my targets today in SPY at $310, and $313, and one of mine in IWM. We're now at the breakdown candle high from early March and above the historical resistance of $145 on IWM (but we did close below).
We're back to where we were sentiment wise pre COVID where technicals are starting to get washed out by the irrationality of too much liquidity, and everyone trying to find a place to get in. If you need a refresher - dips, pullbacks, and retracements were effectively illegal due to central bank intervention. Now that's going to be even more perverted with all of the fed "support" that's in the market. This market is not normal, and will not act as such. We've essentially given meth to a child. Irrationality and buying the dip will be the name of this game if this continues. I mean, it already has but at least technicals were still some what relevant before we got back up here.
Let's talk bear case: GAPS! We now have one at $302, $294, and then $286. And that's just in this last leg up. Not to mention the huge one we have at $228. I'm not saying we HAVE to come down to fill these. But.. 80% of the time the market wants to at some point. During the COVID sell off we filled something like 6 months worth of gaps in 30 days. Also, and this goes without saying, news flow. Just today we had more China news that the market ignored, interestingly enough. And we should start to feel the real affects of the economic downturn here in the next few weeks with more white collar non service jobs starting to get cut, and also the laws barring companies from firing people start to expire. All bets are off if we start seeing another COVID spike. But again, the market moves and then they pin news to it like 80% of the time. Today CNBC read "Dow up 500 points as investors look to recovery due to reopening" or something along those lines. It's bullshit. we know it. The market is being fueld by fed liquidity and risk taking that normally wouldn't be executed due to the market thinking the fed has their back no matter what. There are people out there that literally think the fed will start buying stocks if we have another extreme downturn. This is essentially just corporate socialism and is appaling in my opinon. But that's another conversation. I honestly feel like we're in prime rug pull area anywhere up here just because we have a high retail participation on the buy side, as well as a lot of funds being squeezed out of their short positions. Once that's complete, the hammer drops and retail is left holding the bag, and the funds that were positioned correctly are now chasing the trade.
Bull case: Fed funded market meth. Buying begets buying. This now has started to pick up momentum. We're now within a couple good days of another ATH. The NDX is there now. Without anything the market finds catastrophic the cognitive dissonance will remain and we may even see $350/3500 by mid summer. Crazy right? This market is seemingly bulletproof and it will take a linebacker shot to the knees in order to send us back down to the lows from March, any dip or pullback will most likely be reversed quickly and aggressively with everyone trying to chase the trade and FOMO really starting to set in. I mean, we could honestly be back at ATH's by next week. Everything on the charts points to higher prices. Oh, and not to mention we still have ONE more gap to fill. Next targets would be $324, and then $333.
Check that huge infusion of buying in the 5 min candle at 1 P.M EST effectively setting the market direction till close. No news i could find for it, 1.2m shares. Also $312.10 coming into play as an important number
Above historical Megaphone top trendline
Same with SPX
Still haven't popped the RSI divergence from $2750 though
If we don't reverse from here it's bascially curtains for the bears
IWM on another tear, but bleeding some of that strength into close as SPY rallied. Closing below historical resistance marginally
Closer look
VIX finally confirming bear capitulation
This is insane to me
DJI target hit (100 period MA) - has to close above it tomorrow to confirm trend
Silver, gold, and bonds all absolutely confirming a risk on rally
And the 10 yr actually getting the most meaningful movement it's had in a long time
Look out for these haven moves being fakeouts. It could just be a liquidity hunt before moves back into their ranges. Everyone is looking for a place to stash money right now.
Net net looks like the recession was cancelled in the markets eyes and it will behave as such. Watch for rug pulls. Stay safe and happy trading.
This is not trading advice, this is my own personal opinion based on my own personal TA.
