A basic trading no-no is shorting a bubble. Bubbles can last longer and inflate larger than anyone's imagination. Calling a top is just purely gambling. A real trade is a calculated risk. Gambling is just ignoring all risk management and going based off emotion. Half of the battle in trading is risk management.
This morning, I read multiple posts from permabears shorting and re-shorting the NQ on the way up. Every single one of them was calling a top. What happened to them? It was like watching the Red Wedding from Game of Thrones.
The NQ can drop 1200 points and still be at an uptrend. The top of my channel didn't even stop the NQ. Though, I did project a VIX jump around August 26th. So, the NQ may pullback due to the VIX algorithms for all I know.
The amount of calls placed for tech stocks was insanely high today. So high that it broke the VXN's most recent wedge resistance.
How long can this last? Who knows. I don't know. I don't care to guess. I would rather wait for the NQ to pullback or correct first before diving in. Why? If I long now, I have no idea how much further it is. If I short now, I would very likely join the bear graveyard.
What do you think about hurricane Laura ? Can it make stocks drop ?
Itsallsotiresome
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@akatsiya, Actually, that's a good question. Honestly, I haven't put that much thought into it besides oil and gas. If I were to theorize (from my limited scope)... I would say that the real estate and energy sector would take a hit due to the hurricane's damage. Consumer staples might get a boost for humanitarian aid, but they were also creeping up for days now. However, home improvement/construction and lumber might get a big boost due to infrastructure repairs. Since the hurricane has threatened oil rigs and refineries, that may be short-term bearish for both oil and gas. That said, I also see that as decreasing the supply side of oil and gas. So, investors might initially panic sell as a potential decline in profits. I wouldn't be surprised if those same investors ran to the tech sector recently. However, with fall/winter coming up and most of the industrial areas open, demand might ramp up and eventually increase gas prices - with even less suppliers around.
With all this said, I could be completely wrong as it's mainly theory. That and I totally underestimated the power of this rally before, so everything might rise. What are your thoughts on it?
akatsiya
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Us will likely approve bigger QE and sooner. Good for gold
Bank will foreclouse on some properties as why would sombody pay for a water damaged house
Everything will pull down a little bit maybe 5% for qqq and 10% for spy
Every bubble pops when a needle pokes it.
NASDAQ is far from its potential top. But 5% pull back is overdue
NASDAQ is a canibal, it eats other indexes.
Speaking about shorting the bubble
Do not short NASDAQ but you can short something else.
If NASDAQ falls, everything will fall
Other indexes have many other reasons to fall
I bought edz for tomorrow it is due for small correction too
Itsallsotiresome
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@akatsiya, Whelp, like I said, I could be completely wrong and I was. Now I learned something new.
akatsiya
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Covid, huricane, war, meteorite propobllly good for vix?!