Massive Short Squeeze

Posted: February 18, 2016 in Market Crash, Uncategorized

Well we have seen a massive short squeeze. Only 2 times since 1990 the US Indexes had three consecutive days of rally.

So is the volatility period finish?

In reality it is quite probable that it is not finished yet. Nor the US Index nor the Australian recovered even the simplest of indicators (Moving Average 50 or 200) – so the rally is welcome, but has very little significance.

On a pure technical analysis basis…it is more a last occasion to sell than anything else.

A typical sign of a short squeeze  is that the Most Shorted Stocks all rallied the hardest (average +5%) .

Also there are too many divergences coming from the mainly institutional markets (volatility/derivatives, credit spaces, Treasury and gold) that indicate an “I do not believe the rally” position.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s