NDX (06/19/2020) - Unexpected short squeezing
Updated
FA
-Cov-19 cases continue to rise in South and West America.
cnbc.com/2020/06/18/california-arizona-florida-report-record-spikes-in-coronavirus-cases.html
-"fake" Moderna news created optimism for investors:
cnbc.com/2020/06/17/moderna-ceo-sees-high-probability-of-success-with-covid-19-vaccine.html
-Jobless claim today was 1.566 million vs 1.3 million estimated.
-FED will increase treasury purchases overnight on Friday early morning (4 times bigger than Thursday - 12.825 billion vs 3.6 billion)
newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details
The key is treasury securities will act as collateral for more aggressive REPO.
-FED repo will be more aggressive tonight. This is the reason why I called a bear trap this morning.
-Treasury and FED are working closely together to ensure the market won't tank before the election
youtube.com/watch?v=Pix-KmDWzMA
TA
-NDX is still trading above EMA: bullish
-NDX is neutral for both direction according to squeeze and RSI
-Options expiring Friday with high puts/calls ratio: potential short squeezing if the market gap up tmr.
-Potential for NDX to come back ATH is still high.
Trading note: Sold AAL 06/19 at the open. Bought more SPY 311 06/19 calls right after.
Bottom line: I know there is a lot of urge to short this market as bad news is flooding the market. However, FED and the treasury will take more aggressive actions in the future (create even more liquidity). At the end of the day, liquidity moves the market.
Good luck and thank you.
-Cov-19 cases continue to rise in South and West America.
cnbc.com/2020/06/18/california-arizona-florida-report-record-spikes-in-coronavirus-cases.html
-"fake" Moderna news created optimism for investors:
cnbc.com/2020/06/17/moderna-ceo-sees-high-probability-of-success-with-covid-19-vaccine.html
-Jobless claim today was 1.566 million vs 1.3 million estimated.
-FED will increase treasury purchases overnight on Friday early morning (4 times bigger than Thursday - 12.825 billion vs 3.6 billion)
newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details
The key is treasury securities will act as collateral for more aggressive REPO.
-FED repo will be more aggressive tonight. This is the reason why I called a bear trap this morning.
-Treasury and FED are working closely together to ensure the market won't tank before the election
youtube.com/watch?v=Pix-KmDWzMA
TA
-NDX is still trading above EMA: bullish
-NDX is neutral for both direction according to squeeze and RSI
-Options expiring Friday with high puts/calls ratio: potential short squeezing if the market gap up tmr.
-Potential for NDX to come back ATH is still high.
Trading note: Sold AAL 06/19 at the open. Bought more SPY 311 06/19 calls right after.
Bottom line: I know there is a lot of urge to short this market as bad news is flooding the market. However, FED and the treasury will take more aggressive actions in the future (create even more liquidity). At the end of the day, liquidity moves the market.
Good luck and thank you.
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