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    • May 31, 2022

More Buyers or Sellers: Busted budgets


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john
May 31, 2022

On the radio today a new advert from Pfizer pushing people to get tested so that doctors can prescribe their covid treatment. Perhaps they have noticed that people aren't bothering with testing any more.

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Dan Diaz
May 31, 2022

Hi John, What are your thoughts, if any, on Silvergate Bank ($SI). It’s a play on crypto. Thank you in advance! Dan

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John
May 31, 2022
Replying to

Hi Dan


Big picture it looks like we completed a head and shoulders top with a neckline at 85.



That 85 level should now serve as resistance. The last leg down looks like an incompleted C wave of a big zig-zag correction from the highs.



It looks like we just completed the 4th wave of C today so I'd expect it to trade down to the 40-45 region. At that point positioning should be completely clean and it probably turns higher.

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Unknown member
May 31, 2022

Hi John,


are you able to elaborate how you determine whether a trade is crowded and how you see a stock trading as if positioning were long/short?

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john
May 31, 2022
Replying to

Hi Jeffrey Sure, I wrote about this in an early edition of the blog: https://www.davidwoounbound.com/post/more-buyers-or-sellers-the-fall-and-rise-of-reginald-perrin In particular see the example of DKNG in this piece. Basically the idea is that positioning influences the skewness of returns, and we can measure this using both the historical return series and the implied volatility skew.

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