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Started By
Message
How long does this Stock Market short squeeze last ?
Posted on 11/4/23 at 9:53 am
Posted on 11/4/23 at 9:53 am
AAPL gave weak guidance and AAPL stock was actually down yesterday while the Market was screaming higher.
This 3 day pop is mostly due to massive short covering due to Fed sounding dovish.
Could continue for a while, probably to be followed by some big down days once the shorts have covered and those that are riding the short squeeze decide to cash out and lock in their profits.
The fact that the market screamed higher while AAPL was down and giving weak guidance tells me that this pop isn't based on fundamentals.
If not for the Fed sounding dovish, which can always change, AAPL would have been down far more after earnings and taken the market with it.
This 3 day pop is mostly due to massive short covering due to Fed sounding dovish.
Could continue for a while, probably to be followed by some big down days once the shorts have covered and those that are riding the short squeeze decide to cash out and lock in their profits.
The fact that the market screamed higher while AAPL was down and giving weak guidance tells me that this pop isn't based on fundamentals.
If not for the Fed sounding dovish, which can always change, AAPL would have been down far more after earnings and taken the market with it.
6
Posted on 11/4/23 at 9:54 am to LSU Warren
quote:
mostly due to massive short covering due to Fed sounding dovish
Can you provide the data that supports this?
ETA: because I personally can’t. But I can show bearish sentiment at pretty extreme levels and fund manager surveys that show cash on the sidelines is relatively high.
This post was edited on 11/4/23 at 9:59 am
Posted on 11/4/23 at 10:10 am to LSUcam7
quote:
Can you provide the data that supports this?
My humble opinion based on critical thinking and logic.
The market screaming higher every day after AAPL gave weak guidance tells me that a lot of this is short covering after the Fed announcement.
People have to buy the stocks & indexes that they are short to get out of their short.
A lot of people know that the shorts are being squeezed and are riding the pop.
Some of the flush at the end of October is due to tax loss selling, which ended October 31 and those beaten down stocks are now being bought which is contributing to the pop.
But for the most part the market ignoring AAPL weak guidance and screaming higher has to be a short squeeze rally due to the Fed.
I'm not saying that the market is going to crash after the shorts are finished covering, I'm just not getting too excited about this rally since I think that it's mostly a short squeeze.
Some people may be scratching their heads if these huge up days are suddenly followed by some huge down days after the shorts finish covering.
I just did a quick Youtube search and here is a guy speaking the same, and as he said the short squeeze could last for weeks.
I just think that it could be very volatile for a while.
Youtube - Fed induced short squeeze
This post was edited on 11/4/23 at 11:02 am
Posted on 11/4/23 at 10:53 am to LSU Warren
I thought the bump was more about the poor employment report bringing more certainty that the Fed won't raise rates soon, if at all. No doubt hedge funds had been boosting their single-stock shorts (for 11 straight weeks leading up to Halloween), so I'm sure there was some covering going on.
Posted on 11/4/23 at 11:21 am to LSU Warren
I’ve learned trying to apply logic to the US stock market is a fools errand. It’s a Fed casino now. Just keep playing.
Posted on 11/4/23 at 12:11 pm to LSU Warren
quote:The S&P 500 Index was up all 5 days this past week.
This 3 day pop is mostly due to massive short covering due to Fed sounding dovish.
That means Monday (+1.20%) and Tuesday (+.65%) were prior to AAPL's earnings release on Friday and prior to the Fed's rate announcement on Wednesday.
Posted on 11/4/23 at 1:06 pm to LSURussian
quote:
The S&P 500 Index was up all 5 days this past week.
That means Monday (+1.20%) and Tuesday (+.65%) were prior to AAPL's earnings release on Friday and prior to the Fed's rate announcement on Wednesday.
I said that some of this pop is due to Tax Loss selling expiring October 31 and that beaten down Tax Loss stocks were rallying due to that.
The market going straight up after Fed meeting is most likely in large part due to short covering, along with FOMO from people that have been on the sidelines.
There was an analyst on CNBC yesterday saying that same thing, that there is a lot of short covering going on.
The idea that the Nasdaq would go up in a straight line while AAPL is dropping, and lowering guidance, does not scream fundamentals.
The short squeeze may go on for a while.
I'm certainly not recommending shorting in the middle of a short squeeze, I would also be a little nervous about chasing a short squeeze.
Rates are still high, and the largest market cap company in the world, and most index weighted stock AAPL just guided lower.
The Fed wasn't expected to raise rates last week, the market reacting the way that it is off of slightly dovish comments seems a little overdone.
This post was edited on 11/4/23 at 1:37 pm
Posted on 11/4/23 at 2:31 pm to LSU Warren
Tech is fundamentally poised to kick more arse.
Microsoft and Google both beat estimates with Google's cloud growth slowing a bit. Both emphasized their AI investments and spoke of huge AI profits on the way.
Meta also blew away estimates but analysts soured on it because it projected Q4 revenue to be less than their expectations ($38.3B instead of $38.8B). Meta's daily active users increased by 7%. They reduced expenses by $20.4B from a year ago.
Ad sales at Meta rose 24% on-year in Q3, and ads at Google Search and YouTube both rose in double digits.
Amazon also crushed estimates ($0.94 EPS vs. $0.58 EPS). That's a 62% beat. Q3 revenue rose 13% on-year to $143.1B, up from 11% growth in Q2. Profit tripled to nearly $10B from July to September. Analysts weren't happy with revenue growth in Amazon's Web Services (AWS), which were in line with the previous quarter and Wall Street estimates. So, coming in on target was "negative."
Amazon's CEO Andy Jassy said that AI is an opportunity worth "tens of billions" to AWS. In September, they invested $1.25B in OpenAI competitor Anthropic, which could rise to over $4B over time. "Our generative AI business is growing very, very quickly.... There's so much more to provide. It's going to be a long time before we run out of services."
Microsoft and Google both beat estimates with Google's cloud growth slowing a bit. Both emphasized their AI investments and spoke of huge AI profits on the way.
Meta also blew away estimates but analysts soured on it because it projected Q4 revenue to be less than their expectations ($38.3B instead of $38.8B). Meta's daily active users increased by 7%. They reduced expenses by $20.4B from a year ago.
Ad sales at Meta rose 24% on-year in Q3, and ads at Google Search and YouTube both rose in double digits.
Amazon also crushed estimates ($0.94 EPS vs. $0.58 EPS). That's a 62% beat. Q3 revenue rose 13% on-year to $143.1B, up from 11% growth in Q2. Profit tripled to nearly $10B from July to September. Analysts weren't happy with revenue growth in Amazon's Web Services (AWS), which were in line with the previous quarter and Wall Street estimates. So, coming in on target was "negative."
Amazon's CEO Andy Jassy said that AI is an opportunity worth "tens of billions" to AWS. In September, they invested $1.25B in OpenAI competitor Anthropic, which could rise to over $4B over time. "Our generative AI business is growing very, very quickly.... There's so much more to provide. It's going to be a long time before we run out of services."
Posted on 11/4/23 at 2:45 pm to RoyalWe
Tough call, those stocks are up BIG from their 52 week lows.
Snowflake SNOW hasn't done much the last 3 days.
Not sure what's up with them.
Snowflake SNOW hasn't done much the last 3 days.
Not sure what's up with them.
This post was edited on 11/4/23 at 2:57 pm
Posted on 11/4/23 at 3:31 pm to LSU Warren
I see AI as an opportunity as large as the advent of the Internet. Through that lens, there is plenty of room to grow.
Posted on 11/4/23 at 4:19 pm to LSU Warren
lol this move has literally nothing to do with a “short squeeze”. Big money piled into puts, dealers shorted the markets lower, they monetized the puts and piled into calls.
We will rally into early January, try to make ATH, the rug pull like you’ve never seen and market won’t recover for 5+ years.
We will rally into early January, try to make ATH, the rug pull like you’ve never seen and market won’t recover for 5+ years.
Posted on 11/4/23 at 5:26 pm to BourbonDad
quote:
We will rally into early January, try to make ATH, the rug pull like you’ve never seen and market won’t recover for 5+ years.
I see you’ve got it all figured out. LOL
Posted on 11/4/23 at 5:30 pm to notiger1997
Bookmark it and remind me end of January.
Posted on 11/4/23 at 6:07 pm to BourbonDad
quote:Remind you at the end of January to check your 5-year prediction?
Bookmark it and remind me end of January.
Posted on 11/4/23 at 8:34 pm to notiger1997
Pundits on fox Business said we would have a summer rally…
We did.
Pundits on fox business said we would have a Sept Oct pull back.
We did.
Pundits on fox business said we will rally at the end of the year.
We are.
We did.
Pundits on fox business said we would have a Sept Oct pull back.
We did.
Pundits on fox business said we will rally at the end of the year.
We are.
Posted on 11/5/23 at 9:10 am to LSU Warren
Evidence for short covering: We're in a downtrend still making lower lows and lower highs. Volume was low on the rally up. Yield curve uninverting.
Evidence for new rally beginning: Market breadth went up greatly usually only seen in the beginning of new moves up.
This post was edited on 11/5/23 at 9:14 am
Posted on 4/4/24 at 6:57 pm to The Scofflaw
Bump
S&P up 18% since OP, up 6.25% since end of January
Russell 2000 up 16.7% & 5.6%
S&P up 18% since OP, up 6.25% since end of January
Russell 2000 up 16.7% & 5.6%
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