Interesting trading lately.
First thing on the 19th August there was a big buy ~1.4million.
This appeared to be followed by a lot of selling. That selling turns out to have been composed of a lot of shorts as per the graph below.
This drove up the Days-to-Cover and risk signal to short positions.
I am of the strong opinion that the rise since has consisted of a large proportion of short closures. (The next few days of data should provide clarity on that)
I am trying to gauge at what limit they will stop closing positions so urgently. At that point I believe there will be a price plateau and maybe some retraction to recoup and repair some of the singed underwear.
The jump in short positions of the 19th was almost 10 million. That was just under half of the days trading. Lets say that at least that many would need to close to get the risk down to a more acceptable level. The last three days of trading has seen 8.8, 8.9 and 14.2 million trades. The could well account for the requisite number of position closures to cover the rise with a large additional number of buys providing for a short squeeze run-on.
The price today has seen some stabilization which could be the end of the potential short squeeze and reduction in buying pressure for a while. Probably time to take some profit I think.
All IMO only and DYOR
