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The Nasdaq Composite is only 10% away from hitting 10,000. Less than 2 months ago, it was at 6600. The velocity of the correction and of the recovery has been of epic proportions. Something future generations will talk about and study.
The main story from last week is the notable shift in market sentiment. Look at the crazy reaction to ordinary earnings reports. The earnings season started slowly with banks bombing and large-cap tech stocks line NFLX, AMZN, and FB either gapping down because of their big pre-earnings rally or slightly gaping up and getting faded. Then it came last week. Not only we saw stocks like AYX fully recover after guiding lower but we also witnessed some of the most epic short squeezes that led to 20-30% daily moves.
The sentiment has basically shifted from people getting scared from each 1% down move and running for the hills to feeling extremely comfortable buying dips. Maybe this is the time when they pull the rug underneath everyone’s feet but I would not hold my breath for it. The price action is currently constructive and there’s no wisdom or glory in fighting the tape. I can change my market view quickly when the facts change.
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