[Watch Now]: Stock Market Roaring Higher

Let’s Discuss Powell, China, and the Short Squeeze

Cheddar TV – June 5th, 2019

As the stock market opened higher, our key focus was on Powell’s commentary, the on-going trade war and the stock market.

After trading lower throughout May, it started June with a bang. Why did this happen, and where are the opportunities for us investors?

Whenever the stock market takes a turn for the worst, typically following a macro catalyst (in this instance, the escalating trade war with China along with new threats on Mexico), it will get to a point where it can’t seem to get any worse. It’s always right around then, that sentiment is so bearish and so many traders are short, that the market catapults back in the opposite direction – and flies higher.

We are on the lookout for this phenomenon when the put/call ratio gets very high, telling us that too many traders are short. All it takes is either news that wasn’t as bad as previously though, or, some good news, to cause an overnight gap higher in the market. When the market does in fact gap higher, all of those traders who were short begin covering – which is known as the short squeeze. This buying, coupled with bulls who finally feel it’s safe, come out in droves, catapulting the market higher. I discussed this, along with the overall macro issues on Cheddar on the floor of the NYSE.

The full link, along with the article can be found right here: Click Here to Learn More 

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