Are there any Bears left alive?
Today was the largest short squeeze ever, as Mr. TopStep quoted on their Twitter feed. I believe it, as I'm so far underwater on my short positions now, I think I can see the oil coming up from the seabed floor now.
I've covered basically my thoughts in the video above, but I want to add some more. The triangle breakout on the market from the top in April is only a slight breakout, and could still be considered "still inside the triangle/channel"... The downward sloping top trendline of the channel (look at 60 minute chart for channel), along with the horizontal support line around the 1040 level, forms a very larger triangle pattern.
It's basically the same upper trendline of the falling channel that is seen clearly on the 60 minute chart, only without the lower sloping trendline of the channel. Just replace it with the horizontal support line around the 1040 area, and you have your large triangle. Hopefully that makes sense too you (as the horizontal line isn't shown in the chart)?
Today the market popped outside the triangle (also the top trendline on the downward sloping falling channel... which is actually the same line). But, I believe it's just a head fake, and it will reverse hard and go back down next week.
The main pattern that is now forming is called a "MA" pattern. These MA patterns, as explained in the video are very bearish, and if it plays out... an 80-100 point move down is too be expected. But, even though I still believe we will sell off hard next week, I have to consider how much open interest there is on the June put options, as next week is opx for June.
So, the possibility of a pattern failure is larger then usual, and that leaves the door open for a gap up on Monday and a continued run up or sideways into Friday. I don't believe that to be the case, but it is possible. They want to take everyones' money, and I just don't know if there are now more bulls or bears left in the market? The open interest says there are more bears, but today's squeeze could have a lot of them switching sides?
Needless to say, I'm disappointed by today's gap up instead of gap down, but it totally worked by faking out everyone out... especially me. Again, I don't expect much for tomorrow but a flat day overall. A move up to the 1093.56 20ema on the daily chart is likely, but I expect it to pull back and close around where it opens... and not break that level.
The best hope the bears can have is for every other blog to now start calling for 1100 or better, to form the right shoulder that appears so obvious now, as the next likely target. First 1100, then 1120, and finally 1150 where all the bulls can exit safely and the bears can board safely. Seems too easy too me, just like crashing this week was too easy. So next week looks like the rally up in opx that will make that right shoulder... which again, seems too easy too me.
Best of luck to both bulls and bears...