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Saturday, April 26, 2025

Saturday Market Update: Bitcoin, $GDX Gold miners, $VIX, Tesla, and other Bear Traps

Wrapping up last weeks market action:  

We saw a little bull trap set on Easter Monday, followed by markets driven back to around the same levels we were trading at 2 weeks ago, by Friday's close. Not much of a game changer, and not the rally I was expecting... 

From last weeks outlook:  

 "Stocks actually look great here, and the $VIX is 50% off the recent highs, and that means that the manufactured fear - propagated by the mass distraction lame stream media - is drying up. 
The continuing consolidation probably pushes back a continuation of the rally - which started last week - a few more weeks."

I expected the market to consolidate a little longer, before seeing a more sustainable rally, but once the $VIX broke below the 30 level it was all over but the crying for the Trump haters.  

My previous outlook still stands, which means that it looks like this rally is a little premature, and short sighted.

The Catalyst for last week's trade seemed to be more about manipulating the weekly options market, more than anything else....

 I'm not an Options expert, but I see volatility being manipulated (sold) through the use of 0DTE options, and I suspect Dow 40k (round number), 5500 on the $SPX, and even Bitcoin 95k were the main drivers...

 Bullish traders came back from Passover with a skip in their step and said, "hey let's squeeze some short sellers", and a market rally was born! 

Of course the biggest payoff was in driving several heavily shorted stocks & leveraged ETFs...  

$TNA the leveraged (3X small-caps bull) is a good example of this:   

See where the price action was jacked back above the lower pattern line? It's no wonder that the Russell 2000 was able to close basically unchanged.


 Tesla up 10% 

Tesla - why else would Tesla investors wait until Friday to drive the stock up 10%? Weekly Options   

 Tesla Stock Climbs Despite Pulling Guidance, but Is More Downside Ahead? fool.com

The short sellers were further squeeze as the price action was driven back above the 50 day moving average, in order to trigger buying programs.

And of course the leveraged Tesla bear ETF $TSLS was used to that end. 

See where the rug was pulled....


   

This is the new normal manipulation though the 0DTE and leveraged ETF's

What I didn't mention in the above tweet is that leveraged ETF's are being used by the already over leveraged hedge funds to apply additional leverage to which-ever positions they choose, but if you dig a little deeper into the tweet he was responding to: 

Bill Ackman

"I believe that it is much more likely that recent sharp moves in these asset classes is due to highly leveraged market participants being forced out of positions than due to fundamentals."

And he's absolutely right!  

Of course he can complain all he wants; the Hedge funds are not giving up their advantage any time soon!

Gold & Gold Miners 

I think we could see another push in Gold miners, and especially if we're going to see another washout ahead of Memorial Day. 

$GDX - Support is 46.95 and I think we could easily see it pumped to another recent high.   

We may see money rotate out of the wildly overpriced Bitcoin market, help to fuel the rally back into gold? 

It should be an interesting next 2 weeks, as the next Fed meeting approaches. 

Take Care, AA 





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