Putting in eye drops after Tuesday’s laser procedure, I quietly smiled to myself. I had taken two days off from the screens and the market went crazy, states Ian Murphy of MurphyTrading.com.
The media is running with a narrative of plucky Reddit rebels stealing from nasty hedge funds—an “occupy Wall Street from your basement” moment.
I suspect there is something else at play and the explosion in a handful of shares looks more like a Ponzi scheme, a short-squeeze rally and a traditional pump-n-dump all rolled into one. If you are trading these stocks or got caught on the wrong side of a move, the solution for both long and short positions is a hard protective stop.
Meanwhile, in yesterday’s session the S&P 500 (SPX) pulled back sharply to its -1ATR line but closed in neutral territory. Composite Help almost crossed the zero line and Pessimism surged to 21%—this time the divergence signals did their job.
The bull triggers on the US Help strategy were both stopped out and now we sit in cash waiting for the next trigger to confirm.
The VIX strategy flashed a trigger to short the US market with an initial target of 3612.20 as shown above.
Stay safe and trade safe!
Learn more about Ian Murphy at MurphyTrading.com.
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