While there's upside momentum as the IWM and Russell 3000 (lots of COMPQX components in there), I may just add to the Jan IWM $112 Put or SRTY (3x short IWM) which is only seeing -6% drawdown even with this move , I'll likely have to decide very quickly, but this is very tempting.
Once I saw the IWM intraday chart with a diaganol line with no corrections on diminishing volume, I knew exactly what I was looking at,
the hallmarks of a short squeeze, but I just have to wonder how many are left as you saw the recent Investors Intelligence Survey chart showing bears down to historic lows, the lowest since they've kept data back to 1990.
The real threat here is what I mentioned before, the lack of checks and balances, shorts are a part of a healthy market as they represent future buyers that are already committed, when a market falls hard, shorts take profits and to do that they cover or buy, but with so few, there's no natural demand built in and things can get out of hand very quickly, especially as we are at all time highs, we have record (for the year) retail moving in to domestic mutual funds and there are no shorts to act as a natural buffer.
I knew exactly where to look, my Most Shorted Index (R3K components)
The MSI in red vs the R3K, you can see longer term it was falling apart, but intraday...
This is the short squeeze.
The IWM intraday is seeing migration of a negative signal meaning someone is ddoing the same thing I'm considering, selling or shorting in to the squeeze as migration of the divergence continues.
to the 2 min
3 min and the 5 min is already at a leading negative divergence and now
The 10 min is clear,
plus it's a channel buster and a big one at that.
I'll likely enter IWM Jan puts (112) and/or add to SRTY long (3x short the IWM) equity position.
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