We're seeing another little short squeeze on this 1st Tuesday after the long Memorial Day weekend.
Here's a good view of the sellers of the $QQQ, being taken out behind the woodshed:
$SQQQ 2X $QQQ bear ETF
I'm not going to go so far as to say to "never" sell a dull market", but you gotta figure nobody wants to get short going into a long weekend (Memorial Day).
Friday's sell-off
Looking back at my immediate take on Friday's pullback: Volatility was sold at the open.
$VIX is set to open around 25, so the sellers aren't serious. Plus we have holiday trading for the next week, ahead of the summer doldrums. #BearTrap
— Veteran Market Timer (@3Xtraders) May 23, 2025
Combine that with the fact that the $SPX pulled back to the 200 day moving average on Friday, and it was pretty obvious the market was set to charge out of the gate this week.
I figured traders would rush in and buy the dip again, but with NVIDIA earnings right around the corner, there's no telling what's going to happen next, and I've already moved out of tech.
After the rally of the past several weeks, most everything looks toppy to me, except Energy. I think we may see a sector rotation... as I tweeted on Friday.
This is your signal to dump over valued #mag7 stonks, and rotate into Energy. #StocksToBuy #StocksToTrade pic.twitter.com/b0TqXCz6Zw
— Veteran Market Timer (@3Xtraders) May 23, 2025
I don't rely on Elliott Wave theory too much anymore, although it does appear that the $SPX has completed a simple 5 wave impulse.
$SPX 1-2-3-4-5
.png)
If we do get a pullback, that's probably going to set up for another short squeeze in early July.
GL, AA
No comments:
Post a Comment