Market Short Squeeze

Market Short Squeeze




Market Short Squeeze.

Not the best of times as trades go, we’re still believing in a Bear market.

Back in December 2018 and in to January 2019, the markets looked to be in free fall, almost dropping like a lead balloon.

Investors were worried about the Fed potentially increasing rates and in the UK the continuing Brexit drama.

Even in the last few weeks the Yield Curve on US Treasuries has started to flatten; when the yield curve inverts, we take this as a sign that markets expects interest rates to fall rather than rise in the near future, a warning that a recession, lies ahead.

A good indicator, this being as in all six recessions since the 1970s, the US Treasury Yield Curve has signaled a recession about a year before.

Sellers were quick to get out of the market and prices dropped, since then Indices have risen, investors and traders are asking why?

Many believe this to be a number of reason,

  • The FOMOs (Fear Of Missing Out); Small investors have been buying while stocks became “cheaper” hoping to catch the move of stocks going back in to a Bull run.
  • Buybacks; Companies took the opportunity to buy back shares to increase the value of remaining shares.
  • US /China trade talks; recently have been taking a good position with both sides talking in positive tones.

We took the opportunity to take another position in the FTSE 100 as it rose higher to take a contrarian position about a deal being reached.

So we’re in our trades, for how long depends on the next couple of weeks, for now we’ll be getting hit by the Market Short Squeeze.

Market Short Squeeze

 

Still holding our Dow Jones Trade.

Market Short Squeeze

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




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