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We have been bearish for a couple of years now — and have been patiently waiting for a sign that the bear is waning. Well we’ve certainly had a sign…but is it enough to declare the bottom is in and a new bull has started?
Well maybe, but I am hard to please, we will see if this holds through the month.
This short squeeze is more reminiscent of the 2000 bottom which took a full year to settle down before the new bull phase began. We don’t think this squeeze should take so long to consolidate provided it settles down but we would certainly like to see some consolidation before the picture becomes clearer.
The 1990s bear ended up being a double bottom after the short squeeze there is the possibility that we could have a double bottom in a few months’ time. The buyers were more than likely shorts who couldn’t push through their advantage and were probably liquidating profitable positions to cover losses in other markets.
We would definitely urge caution to anyone thinking about buying something that has risen so much so quickly patience should be rewarded. We believe there will be better positions to be had that represent a better risk reward than today’s price which are at extreme levels relative to sentiment.
Stay close to our charts for profit opportunities.