What a disaster day.
Total short squeeze. Like for real, this was a legit short squeeze.
But ain't nobody be short squeezin' this little b!tch. SO I am still short. And adding. Let's get into what I am seeing.
But first, I have to admit. Today really took me off guard. This really did throw me off. Never have I been taken so off guard before by the market. I mean its happened a few times this year, more so than last year, but like never to this extent where I was like "Woah, what?". And to be honest, the writing was on the wall. The probs for today were quite bullish leaning, but even when your strategy is completely objective (math doesn't care about your feelings. It doesn't require you to revise your counts, or look to fundamentals. It just, is what it is.) I still manage to justify away objective data through my own bias. I justified my short biasness with "well, its not correct for CPI so its TRASH". Which, obviously, models and math strategies I have spent years developing should never be disregarded like that. But, alas, bias is our worst enemy.
Anyway, let's get into my thoughts and analysis and what the math says.
So I want to preface this with what I said before. Math is not like EWT or any other kind of TA. It is really completely objective. So even by amending the data and putting in the most current data, the assessment does not change substantially. Because math is completely objective. There is no subjective element to it. I don't need to look at something and be like "is this a B wave or an A wave or a truncation" etc. etc. So I have to find reason and meaning within the calculations themselves. Because at the end of the day, nothing about my assessments has changed. I just have to ascribe the context and meaning to those numbers. And I think, after looking things over, I get it. So let us go into it.
Analysis:
We clearly had bullish momentum on whatever news. Who really cares about the news. We still remain confined into this regression downtrend that is being pushed up.
The Pearson correlation that Tradingview gives is 0.842 (see image below):
After adding for today's variables, the correlation printed in SPSS is still extremely strong at 0.7085. This is great and sufficient to draw statistically meaningful conclusions from.
So what are those statistically meaningful conclusions that we can draw from? Alright let's get into it the math. And I am going to try to keep this as straight forward and understandable as I can.
Regression Trend:
As of today, our current close cap was 383. Meaning we should not have closed above 383. We did. Is it a problem? No. Why? Because it happens and its normal.
Example:
To put it into a perspective that I can think of which hopefully can be understandable, is by drawing on my previous discipline in nursing as an NP. So, if I get a young patient who is active and healthy and a health weight etc. and notice on a routine blood examination that he or she has an elevated cholesterol. Its odd, especially in the face of the contrary and presentation that I am seeing. Everything else is normal its just that elevated HDL vs LDL ration that is off. So, I could order a slew of more tests, or send the patient for heart assessments, echocardiograms and stress tests. Or, I could immediately start the patient on prescription medication of cholesterol lowering.
OR..... or... I could recognize that, well, this doesn't make sense based on the presentation. Perhaps there is a confounding variable, such as the patient didn't fast before the blood work, ate a high fat meal prior to the blood work, or the various other confounding variables that can affect this test. So, what can I do first? I can send the patient to undergo the test again and review the results. Most times, it magically is normal again and everything is back in harmony. Why did it happen? Because S*IT happens. There are multitudes of confounding variables that are impossible to correct for in life. Whether it be human biology, nature or stocks. We can't correct for every possible variable that is influencing us. But, we can focus on the natural order of things and wait to see things correct (or Regress) back to their natural state.
So what does this mean:
It means that, while the market clearly did not follow the instructions prior to getting their blood work, we just have to wait it out for things to regress back to its natural state. And to depict this diagrammatically, I have extracted the actual regression trend from SPSS and put it into a chart so you can actually see what I mean by these instances of the stock jumping out of its natural trajectory:
You can see, the natural course of SPY's trajectory and the times it goes "rogue" and jumps outside of its normal path for a bit. But at the end of the day, it always corrects back down.
But we can go many steps further. While, like I said, the math and assessment does not change, we can at least MEASURE the average distance the trend detours from its trajectory and the average TIME spent in this detour. So while the assessment doesn't change, how we approach the assessment to add context can vary.
So, to represent it visually, we are essentially measuring this:
So based on this analysis, here are the results:
The average trading days spent outside of the trend are 4, with a max of 16 and a min of 1.
The average distance price travels away from the outer level mean (the max distance) is 6.96 points, with a max of 20.29 points and a min of 0.43 points.
Applying it to where we stand now, that would place us at a close around 390.73, or maximum close of 404.06.
Application:
So, this is all kind of theoretical, I get it. And nothing is sure in stocks just like nothing is sure in life.
But based on this, I am hoping to see us start heading back to our range (capped at around 383 if you remember) within the next 4 trading days.
Based on the monthly probabilities (if you remember my previous post), the results favoured bearishness but not too much bearishness. Like, no new low bearishness. So, you know, in the greater context of things, this does make sense. Its just frustrating and annoying to get caught in it.
However, we did hit Our first monthly bull target on the prospective targets, which was 395. So that's cute.
In terms of the real time monthly targets, you can find them repeated in the main chart above.
First RTT on the monthly is 397. We may get to see that. I don't know.
After running all of this, I am kind of mathed and stats out. So I haven't went too deep into the dailies for tomorrow and I have no idea what to expect. I may just take it off while SPY plays its little short squeezy games that we all stan.
Haha anyway, best of luck everyone!
Trade safe and leave your comments, questions and critiques below.
Total short squeeze. Like for real, this was a legit short squeeze.
But ain't nobody be short squeezin' this little b!tch. SO I am still short. And adding. Let's get into what I am seeing.
But first, I have to admit. Today really took me off guard. This really did throw me off. Never have I been taken so off guard before by the market. I mean its happened a few times this year, more so than last year, but like never to this extent where I was like "Woah, what?". And to be honest, the writing was on the wall. The probs for today were quite bullish leaning, but even when your strategy is completely objective (math doesn't care about your feelings. It doesn't require you to revise your counts, or look to fundamentals. It just, is what it is.) I still manage to justify away objective data through my own bias. I justified my short biasness with "well, its not correct for CPI so its TRASH". Which, obviously, models and math strategies I have spent years developing should never be disregarded like that. But, alas, bias is our worst enemy.
Anyway, let's get into my thoughts and analysis and what the math says.
So I want to preface this with what I said before. Math is not like EWT or any other kind of TA. It is really completely objective. So even by amending the data and putting in the most current data, the assessment does not change substantially. Because math is completely objective. There is no subjective element to it. I don't need to look at something and be like "is this a B wave or an A wave or a truncation" etc. etc. So I have to find reason and meaning within the calculations themselves. Because at the end of the day, nothing about my assessments has changed. I just have to ascribe the context and meaning to those numbers. And I think, after looking things over, I get it. So let us go into it.
Analysis:
We clearly had bullish momentum on whatever news. Who really cares about the news. We still remain confined into this regression downtrend that is being pushed up.
The Pearson correlation that Tradingview gives is 0.842 (see image below):
After adding for today's variables, the correlation printed in SPSS is still extremely strong at 0.7085. This is great and sufficient to draw statistically meaningful conclusions from.
So what are those statistically meaningful conclusions that we can draw from? Alright let's get into it the math. And I am going to try to keep this as straight forward and understandable as I can.
Regression Trend:
As of today, our current close cap was 383. Meaning we should not have closed above 383. We did. Is it a problem? No. Why? Because it happens and its normal.
Example:
To put it into a perspective that I can think of which hopefully can be understandable, is by drawing on my previous discipline in nursing as an NP. So, if I get a young patient who is active and healthy and a health weight etc. and notice on a routine blood examination that he or she has an elevated cholesterol. Its odd, especially in the face of the contrary and presentation that I am seeing. Everything else is normal its just that elevated HDL vs LDL ration that is off. So, I could order a slew of more tests, or send the patient for heart assessments, echocardiograms and stress tests. Or, I could immediately start the patient on prescription medication of cholesterol lowering.
OR..... or... I could recognize that, well, this doesn't make sense based on the presentation. Perhaps there is a confounding variable, such as the patient didn't fast before the blood work, ate a high fat meal prior to the blood work, or the various other confounding variables that can affect this test. So, what can I do first? I can send the patient to undergo the test again and review the results. Most times, it magically is normal again and everything is back in harmony. Why did it happen? Because S*IT happens. There are multitudes of confounding variables that are impossible to correct for in life. Whether it be human biology, nature or stocks. We can't correct for every possible variable that is influencing us. But, we can focus on the natural order of things and wait to see things correct (or Regress) back to their natural state.
So what does this mean:
It means that, while the market clearly did not follow the instructions prior to getting their blood work, we just have to wait it out for things to regress back to its natural state. And to depict this diagrammatically, I have extracted the actual regression trend from SPSS and put it into a chart so you can actually see what I mean by these instances of the stock jumping out of its natural trajectory:
You can see, the natural course of SPY's trajectory and the times it goes "rogue" and jumps outside of its normal path for a bit. But at the end of the day, it always corrects back down.
But we can go many steps further. While, like I said, the math and assessment does not change, we can at least MEASURE the average distance the trend detours from its trajectory and the average TIME spent in this detour. So while the assessment doesn't change, how we approach the assessment to add context can vary.
So, to represent it visually, we are essentially measuring this:
So based on this analysis, here are the results:
The average trading days spent outside of the trend are 4, with a max of 16 and a min of 1.
The average distance price travels away from the outer level mean (the max distance) is 6.96 points, with a max of 20.29 points and a min of 0.43 points.
Applying it to where we stand now, that would place us at a close around 390.73, or maximum close of 404.06.
Application:
So, this is all kind of theoretical, I get it. And nothing is sure in stocks just like nothing is sure in life.
But based on this, I am hoping to see us start heading back to our range (capped at around 383 if you remember) within the next 4 trading days.
Based on the monthly probabilities (if you remember my previous post), the results favoured bearishness but not too much bearishness. Like, no new low bearishness. So, you know, in the greater context of things, this does make sense. Its just frustrating and annoying to get caught in it.
However, we did hit Our first monthly bull target on the prospective targets, which was 395. So that's cute.
In terms of the real time monthly targets, you can find them repeated in the main chart above.
First RTT on the monthly is 397. We may get to see that. I don't know.
After running all of this, I am kind of mathed and stats out. So I haven't went too deep into the dailies for tomorrow and I have no idea what to expect. I may just take it off while SPY plays its little short squeezy games that we all stan.
Haha anyway, best of luck everyone!
Trade safe and leave your comments, questions and critiques below.
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