Once again the market gapped down at the open but bearish exultations were short lived as price quickly turned and proceeded to squeeze higher throughout the rest of the session. And unless futures turn on a dime in the next hour or so we are looking at yet another gap lower at the open this morning. Are we having fun yet?
Bankwalker posted a pretty insightful comment yesterday, which summarized the morbid game that’s currently being played in equities: “Some people with very deep pockets used the very high leverage of index futures contracts during overnight hours when stocks weren’t trading to push down the market by manufacturing a false crisis based on an insignificant non-newsworthy event so they could buy cheaper from weak people that had unwarranted fear.” Well said and I couldn’t have put it any better.
Ever heard someone say ‘I hate to be right but [fill in lucky prediction of your choice]. Well that’s a lie – I of course love to be right, especially when it comes to avoiding nasty market traps. Plus nothing fills my heart with more joy than to pick over hapless disoriented prey after a massive Monday morning opening gap.
So I have not mentioned bitcoin or crypto over the past few months and some of you may have wondered why. For an answer look no further than what happened last Tuesday. Unless you’re living in a cave you probably know by now that BTC suddenly and out of nowhere punched higher and effectively ripped the face off an army of over leveraged small players holding speculative short positions.