In recent days, I’ve been asking the important question: how high will this bounce take us As I also stated last night, I wasn’t so sure we were going to get off so easy as having just a one-day bounce and be done with it. Sure enough! Indeed, if you look very, very closely with a well-trained eye, you can see Nvidia (NASDAQ:NVDA) engaging in a small uptick over the past couple of days.
This unhinged enthusiasm is flowing right into the market as a whole.
The funny thing is that I bet only 1 out of 10 investors could actually articulate what Nvidia does. Even so, it has become the Power and the Glory of the United States economy (because, ya know, chips made in Taiwan). I’m pleased to have taken 28% of my positions off the table first thing last Friday morning, because the Fibonaccis did their duty. At the moment, we’ve definitely burned off that oversold state. By tomorrow afternoon, we’ll see if the NVDA fanboys are right or not (just to be clear, I have absolutely no NVDA position, although obviously I’m hoping for a shocker to the downside).
The steady bleed-out of the small caps has continued in recent weeks, although it’s extremely hard to divine how much higher this may so. I am by no means counting on the day’s highs to have been established in these wee hours. We shall see.
As for my own positioning:
- 16 equity-based shorts, by way of long puts, none of which expire earlier than January 19, 2024 (which is 150 days away);
- 2 ETF-based shorts. One of them, XLU, is likewise long-dated with a January expiration. The odd man out, which I’m not so sure I’m going to retain, is a just-for-the-hell-of-it QQQ position of small size that expires this Friday. I don’t tend to have the temperament for these YOLO-type plays, so I suspect I’ll just eat it on this one as well.
- About 20% cash sitting in the wings.