US stock market is in real trouble......
Key averages are below 50 DMA
Stimulus is in trouble
Job data to be hopeless
Earnings are being sold off
DOW jones is well below 50 DMA
S&P 500 is below 50 DMA
Nasdaq only 90 points above 50 DMA
SOX only 79 points above 50 DMA
Russell 2000 only 9 points above 50 DMA
GME represents an epic battle between High Frequency Traders and determined daytraders, no one stock can crater a healthy market.
BUT when Robinhood " restricts 50 stocks with only 1 shares allowed to buy " you are all set for trouble in stock market.....
50 stocks can and will kill any market....
IF free trading is allowed in 50 Stocks then a chance of " V " shaped recovery is there.
I believe that we slump @ open with Nasdaq, SOX & IWM well below 50 DMA......
IF Robinhood wakes up and allow free trading then only we stabilize...
GME defines a strategy which HFT traders do not like as it is being done against their " Dumb Supercomputers " by human daytraders....and humans are winning against HFT hands down....a reality which upsets " milking small investors "
SO it is an epic battle which has started ....but this time casualty will be so called HFT / smart money / old money...who have friends in regulatory framework.
I am in BB which has negligible short interest about 5%... but is in restricted list and margin in BB has been reduced even by my broker TD Webbroker in Canada.....
Strange times indeed....
SO what to do now in this " crazy trading "
Monitor your stocks closely and react to match your own comfort level
Pay attention to regulatory news as it is bound to change during trading hours....
As far as RSI is concerned in DOW it is @ 38.95...it can go to high 20's....but it could come within first 3 hours of Monday's trading...
IF we have sudden sharp drop in all averages, chance of a " V turn is very high " with some regulatory support statement.
IF you must..then liquidate all your position in pre market or @ open to watch this epic battle from outside.....
Hedge Funds are not taking hits lightly and may overreact in selling their winners to a bargain level.
Market focus has changed and we all must react accordingly, its good to be a spectator than be part of mega selling of good stocks.
Good luck with your own analysis and comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Saleem,
Last week: +1.47% (YTD: +17.31%)
Notable Leaders: TZA FUBO
Notable Laggards: everything else
It was a major profit taking week for the averages, and my portfolio was saved by a large short hedge (TZA) and opportunistic selling/re-buying in some names (PLAN EAT SUMO). It feels like there's still more speculative excess to wring out of this market, so I'll probably stick with this current plan of a short hedge and adding to long term positions on dips. I usually end up buying too early in cases like this, but I'm inherently a stock picker, so I'm more comfortable owning names than cash/shorting.
From an economic standpoint, I still think re-opening stocks can show promise, but the specter of delayed/limited stimulus might dampen the fervor. Any indication our vaccines start to become ineffective due to new strains would cause a serious market problem - so far that isn't quite the case, but is worth considering and understanding the risks.
Holdings: TZA(15.5%), DHI EAT QRVO PLAN FDX GM SNAP TPR COTY, GRWG FUBBO SUMO EH, cash 16.6%
Stocktrader
Hi Stocktrader,
Last week Down 7.34%
YTD UP 2.43%
Saleem
Hi Saleem,
Bought speculative GRTS @ 20.05
New high-profile partnerships recently signal the strength of their platform. It's been one I've watched for years, and only now getting some recognition.
Stocktrader
Hi Saleem,
Added 50% more GRTS @ 18.30
Stocktrader
Hi Stocktrader,
Good luck with GRTS.
Saleem
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