A Great Short Squeeze is Underway

Stocks are OFF THE HIGHS now — but just a short while ago heavily shorted stocks were +5.5% for the session, high beta up in kind. The only way to describe the pin action is “incredible” but not unique. This is what happens when the bears lose their shirt and the ram is pressed against the wall.

You’d be wise to avoid thinking the market will reverse lower and collapse here. There is weakness in risk averse stocks — which stymied my trading gains this morning. Even still, I am +80bps for the session, down from +120bps. I got a little overzealous this morning and chased some things and ended up taking some Ls. These things happen.

My longer term strategic was +3%, now +1.8%.

Is it over?

I don’t think so. However, I am 90% cash in my trading here — only because of the time of day coupled with the idea that perhaps, just maybe, we might see a downside reversal. I am not suggesting it will happen, but merely open to the idea.

The thing about rallies such as this: you needed to be in yesterday before the close to bank the coin. You can possible scalp a little here and a little there — but if you missed out and find yourself chasing stocks already +15% for the day — YOU PLACE YOURSELF AT GRAVE RISK in the event of a reversal.

It’s important we all understand our places in the big scheme of things. Not all of us are destined for greatness. Some of you will never be great and have been designed to plod along merrily in ignorance. This is not my journey, as I am burdened with the task of greatness and battle each and every day to escape the pangs of mediocrity.