The timing of your long position makes sense when you consider the VIX spike above 23 was relatively subdued compared to earlier spikes. The AI sector derating you describe feels more like a necesary recalibration than a fundamental break. Your conviction that real rates will decline and the Fed will cut in Decemeber aligns with the labor market softning we've been seeing. The 1:4 risk reward on your trade captures this asymmetry nicely.
I was short NAS last week ,caught that sell off last week from the weekly high
I couldn’t ignore the previous weekly bearish close ,the biggest bearish close in some time with Nvidia selling off too ,
The question is ,Is there enough interest to be buying up at these highs for potential new all time highs after this long rally from April ? still long but maybe deeper pullbacks into more attractive prices
Much appreciated Mark, great job on the sells… I know many got burnt trying that weeks ago
I don’t consider the length of rallies in my analysis because there’s no theory behind it (e.g. there’s nothing to say we should sell off, just because we’ve rallied), if I were to not buy after rallies, I’d have missed out on a tonne of moves. What I focus on is the regime, is it supportive for upside in US equities? At the minute, the answer is yes
Nicely put Alfie as always and some great points .
This was the first time since April I questioned the bullish sentiment and positioned short for last week which turned out to be a very profitable week .
I don’t consider length of rallies either but the echos of AI bubble continue to ring ,with points below bolstering my trade idea .
What made this sell off feel different to a few weeks ago was the recent Dollar strength with the DXY trading above 1st August NFP high ,printing a new high of 100.350
We have seen a weakening Dollar /rampant stock market for the majority of this year so interesting to see how the year closes .
The Nvidia sell off was widely documented and a more Hawkish sounding Fed as you mention ,potential higher inflation ,50/50 Dec cut .
From a technical perspective NASDAQ printed the largest bearish weekly candle since April the week before last ,I couldn’t ignore that
The timing of your long position makes sense when you consider the VIX spike above 23 was relatively subdued compared to earlier spikes. The AI sector derating you describe feels more like a necesary recalibration than a fundamental break. Your conviction that real rates will decline and the Fed will cut in Decemeber aligns with the labor market softning we've been seeing. The 1:4 risk reward on your trade captures this asymmetry nicely.
Exactly that!
Great review ,enjoyed the AI humour too ha
I was short NAS last week ,caught that sell off last week from the weekly high
I couldn’t ignore the previous weekly bearish close ,the biggest bearish close in some time with Nvidia selling off too ,
The question is ,Is there enough interest to be buying up at these highs for potential new all time highs after this long rally from April ? still long but maybe deeper pullbacks into more attractive prices
We will see
Much appreciated Mark, great job on the sells… I know many got burnt trying that weeks ago
I don’t consider the length of rallies in my analysis because there’s no theory behind it (e.g. there’s nothing to say we should sell off, just because we’ve rallied), if I were to not buy after rallies, I’d have missed out on a tonne of moves. What I focus on is the regime, is it supportive for upside in US equities? At the minute, the answer is yes
Have a great week Mark🙌
Nicely put Alfie as always and some great points .
This was the first time since April I questioned the bullish sentiment and positioned short for last week which turned out to be a very profitable week .
I don’t consider length of rallies either but the echos of AI bubble continue to ring ,with points below bolstering my trade idea .
What made this sell off feel different to a few weeks ago was the recent Dollar strength with the DXY trading above 1st August NFP high ,printing a new high of 100.350
We have seen a weakening Dollar /rampant stock market for the majority of this year so interesting to see how the year closes .
The Nvidia sell off was widely documented and a more Hawkish sounding Fed as you mention ,potential higher inflation ,50/50 Dec cut .
From a technical perspective NASDAQ printed the largest bearish weekly candle since April the week before last ,I couldn’t ignore that
Trade ,I positioned short on the 4h
Entry 25,524
Stop 25,784
Target 24,622
Couldn’t have played out any cleaner
NFP Thursday should give us more clarity
Have a great week
Look forward to the next post as always
Enjoy the trading week
Great run down of analysis, works well👏We should definitely have more clarity this week!