Opening Indications

Well that was interesting, last Friday for the "week Ahead", I was looking for a pre-F_O_M_C relief bounce as the market had been down nearly the whole week, that was the justification for the IWM call trade with weekly calls that expire this Friday which is a VERY short expiration for me, I usually use 3x the time I think I'll need so obviously I wasn't expecting much and in to F_O_M_C, well I think you know my opinion.

This looked and acted like a short squeeze...

 Note the red trendline on the way up, very linear, that's typical short squeeze behavior.

I would have got this post out 15 minutes ago, but I wanted to verify a short squeeze and had to update my Russell 3000 Most Shorted Index and then run it which takes a few minutes, as I thought, someone forced a short squeeze with minimal accumulation on the open.

 The Russell 3000 in green and the R3K Most Shorted Index in red this morning in the white box, you can see the most shorted stocks went straight up taking the index with them.

This is the minimal accumulation on opening weakness I was talking about, it's a small area and a 1 min chart so it's minimal, but likely targeting the right stocks with high short interest.

The intraday 3C action is "in line" meaning the buying on the squeeze was confirmed and the selling on the dump was confirmed, no divergence other than the opening one.

I always say, "I don't trust parabolic moves, they tend to end badly", this is about as parabolic as you get.

For some reason the first 15 minutes or so of TICK data has been missing the last 2-days, but you can see how quickly the TICK went negative to an extreme.

 This is my custom SPY/TICK index, note how quick it went negative and how deep.

This is the IWM call position with this Friday's expiration that was up about 14% at the close yesterday, over +70% when closed today.

Is that it for the pre-F_O_M_C bounce? I don't know, I have a feeling it's not, but like we saw last week with divergences being run over, this bit of strength was sold VERY quickly and RIGHT AFTER the CPI data came out which was not market friendly by any stretch of the immagination.