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Why NQ Bears, Why? 8/25/202020

Why NQ Bears, Why? 8/25/202020

NQ at the daily view.

NQ has evolved to the place where bears go to die or the bear graveyard. In their minds, every bear keeps thinking that they'll get the most juice of their shorts from the NQ. So convinced by their grand dreams of a crash, they blindly short the NQ and keep calling a top. The issue? They never checked liquidity levels, credit markets, or available cash. In the end, the permabears keep covering their shorts to a new all-time high. This has been going on since June now.

Trading basics: you don't short a bubble, ever. Why? Bubbles can inflate much longer and larger than any permabear's imagination. Therefore, you will lose 99% of the time for calling a top.

Permabears would blame that it's a fake rally, too many buyers below, the Fed, or whatever. At the end of the day, they never checked the internals in the market and made a bad decision. What's worse is that by blaming it on anything else but themselves caused them not to learn their lesson. So, they kept shorting and short covering.

The lesson that both permabears and permabulls need to learn is that the market will do whatever it wants. There is nothing we can do about it. At the end of the day, the market doesn't care about anyone's emotions or grand dream. Though, the people who lose the most are the ones who buy into their dream.

NQ is in an awkward position. It's too high to go long due to fear of a sudden pullback. However, liquidity levels are too high to short. I'm not shorting the NQ until I see the market internal data support a downtrend. I'll just play the waiting game at a major support.

Which stocks are still being shorted? Here is a list of stocks with the most short interest. Guess which ones?

https://www.nasdaq.com/market-activity/quotes/short-interest

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